Comparison of Basic Structures of Business; Corp, Llc, Partnership, and Sole Proprietor

Memo

To: John Doe

From: Jane Smith

CC:

Date: October 13, 2010

Re: Explain Basic Accounting Concepts and Business Structures ____________________________________________________________

_______

You gave the students in the class the following individual assignment: Explain Basic Accounting Concepts and Business Structures. Write a paper covering the following four topics:

Topic 1: Identify and describe the sources of generally accepted accounting principles. Identify the

hierarchy of sources explaining why the hierarchy is important.

Topic 2: Describe what good accounting information is using the qualities of accounting information from your readings this week.

Topic 3: Describe how an accrual based accounting system is different from a cash basis of accounting.

Topic 4: Describe the types of business structures and the defining features of each structure.

Topic 1. The sources of accounting principles that are generally accepted are categorized in descending order of authority as follows:

a. Officially established accounting principles consist of FASAB Statements of Federal Financial Accounting Standards (Standards) and Interpretations. FASAB Standards and Interpretations will be periodically incorporated in a publication by the FASAB.

b. FASAB Technical Bulletins and, if specifically made applicable to federal reporting entities by the AICPA and cleared by the FASAB, AICPA Industry Audit and Accounting Guides.

c. Technical Releases of the Accounting and Auditing Policy Committee of the FASAB.

d. Implementation guides published by the FASAB staff, as well as practices that are widely recognized and prevalent in the federal government.1

Topic 2. Good accounting information may expressed as ‘better’ (more useful) versus ‘inferior’ (less useful) information. As stated in FASB Concepts Statement No. 2 “the qualities that distinguish ‘better’ (more useful) information from ’inferior’ (less useful) information are primarily...