会计英语 Unit Two.pptVIP

Unit Two GAAP Generally Accepted Accounting Principle (FASB develop it) Learning Objectives Understand the definition, terms, characteristic, difficulties of each accounting conventions.( if they have) 一 Accounting Entity convention 1 Definition: the smallest unit of activity with a self-contained accounting system. 2 Characteristic: each accounting entity interprets transactions from its own viewpoint. 3 In other words, the business is viewed as an entity separate from its owners, creditors, or other stakeholders. 二 Going-concern convention (continuity convention) 1 Definition: the entity will remain in operation for the foreseeable future. 2 the assumption of continuity is made in the absence of evidence to the contrary. 三 Monetary convention 1 Definition: an entity’s transactions are recorded in the monetary unit of the country in which it is operating. (economic data be recorded in dollars) 2 Financial statements are presented in the currency of the country where the reports are published 四 Accounting period convention(Time-period) measure the result of an entity’s operation over a relatively short period and to present a Balance Sheet at frequent intervals. 五 Objectivity convention the accounting records and reports be base upon objectivity evidence. 六 Relevance if accounting information is to be of any use, it must be relevant for its intended use. 七 Reliability 1 Truthfulness (validity) 2 Verifiability 3 Neutrality 八 Understandability 九 Comparability 1 Consistency: implies that the accounting procedures for a particular type of transaction are the same from one period to the next. 2 Uniformity requires that companies in the same industry use the same accounting policies and procedures. 十 Conservatism convention accountants act conservatively or prudently in the measurement of profit. (reasonable pessimism) Revenue: certain Expense: probable Assets: lowest Liab