Accounting 403

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Introduction, Review of Accounting Process and Financial Statements

ACC 403 Principles of Accounting

Accounts use general accepted accounting principles (GAAP) to guide them in recording and reporting financial information. GAAP covers a broad set of principles that have been developed by accounting professionals and the Security and Exchange Commission (SEC). GAAP are guidelines on companies so that investors have a minimum level of consistency in the financial statements they use when analyzing companies for investment purposes. GAAP cover such things as revenue, balance sheet and outstanding shares for measurements. Companies are expected to follow GAAP rules when reporting their financial data within their financial statements. Companies that have investors need to know the progress about a company or companies because it is their money they are inputting into the company. The use of GAAP sets a standard for investors and at the same time gives the company accountant guidelines on how to present the company’s asset, liabilities and many other factors for accountability and planning.

International Accounting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) that is becoming a global standard for the preparation of public company financial statements. The SEC envisions 2015 as the earliest date for the required use of IFRS by U.S. public companies.

Liquidity is a measure of a company’s ability to meet its short-term obligations using its most liquid assets. That is, accounting liquidity is the ease with which a company can pay its bills and liabilities over the next year, especially if it must convert its assets into cash in order to do so. Two common ways to measure accounting liquidity are the current ratio and the quick ratio.

Location of balance sheet and income statement and statement of cash flow for both Dole and Nestle Corporation:


For Dole,...