Tui Acc 403 Module 1

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Introduction, Review of Accounting Process and Financial Statements


James W. Stubblefield


Dr. Annette Hebble

Generally Accepted Accounting Principles (US GAAP)

GAAP is the term used to refer to the standard framework of guidelines for financial accounting used in any given jurisdiction. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements. Financial accounting is information that must be assembled and reported objectively. Third-parties who must rely on such information have a right to be assured that the data are free from bias and inconsistency, whether deliberate or not. For this reason, financial accounting relies on certain standards or guides that are called "Generally Accepted Accounting Principles"

International Accounting Standards (ISFR)

These are the Standards, Interpretations, and the Framework adopted by the International Accounting Standards Board (IASB). Many of the standards forming part of IFRS are known by the older name of International Accounting Standards (IAS). IAS was issued between 1973 and 2001 by the Board of the International Accounting Standards Committee (IASC). On 1 April 2001, the new IASB took over from the IASC the responsibility for setting International Accounting Standards. During its first meeting the new Board adopted existing IAS and SICs. The IASB has continued to develop standards calling the new standards IFRS.


Accounting liquidity (liquidity) is a measure of the ability of a debtor to pay his debts as and when they fall due. It is usually expressed as a ratio or a percentage of current liabilities. For a corporation with a published balance sheet there are various ratios used to calculate a measure of liquidity. These include the following: The current ratio, which is the simplest measure and is calculated by dividing the total current...