Environment and Theoretical Structure of Financial Accounting
Environment and Theoretical Structure of Financial Accounting
After studying this chapter, you should be able to:
LO1 Describe the function and primary focus of financial accounting.
LO2 Explain the difference between cash and accrual accounting.
LO3 Define generally accepted accounting principles (GAAP) and discuss the historical development of accounting standards.
LO4 Explain why the establishment of accounting standards is characterized as a political process.
LO5 Explain the purpose of the FASB's conceptual framework.
LO6 Identify the objectives of financial reporting, the qualitative characteristics of accounting information, and the elements of financial statements.
LO7 Describe the four basic assumptions underlying GAAP.
LO8 Describe the four broad accounting principles that guide accounting practice.
