Accounting in Action

Answer

The accounting profession has developed standards that are generally accepted and universally practiced. This common set of standards is called generally accepted accounting principles (GAAP). these standards indicate how to report economic events.

the primary accounting standard-setting body in the United States is the Financial Accounting Standards Board (FASB). The Securities and Exchange Commission (SEC) is the agency of the U.S. government that oversees U.S. financial markets and accounting standard-setting bodies. The SEC relies on the FASB to develop accounting standards, which public companies must follow. Many countries outside of the United States have adopted the accounting Standards issued by the International Accounting Standards Board (IASB). These standards are called International Financial Reporting Standards (IFRS).

As markets become more global. It is often desirable to compare the results of companies from different countries that report using different accounting standards. In order to increase comparability, in recent years the two standard setting bodies have made efforts to reduce the differences between U.S. GAAP and IFRS.

 

Source: Accounting Principles by Weygandt, Kimmel, & Kieso

Problems: Accounting in Action

Problem-1: Accounting in Action

On April 1, Julie Spengel established Spengel's Travel Agency. The following transactions were completed during the month: Invested $15,000 cash to start the agency Paid $600 cash for April office...

Problem-2: Accounting in Action

Judi Salem opened a law office on July 1, 2018. On July 31, the balance sheet showed Cash $5,000, Account Receivable $1,500, Supplies $500, Equipment $6,000, Accounts Payable $4,200 and...

Problem-3: Accounting in Action

On June 1, Cindy Godfrey started Divine Designs Co., a company that provides cash opportunities by investing $12000 cash in the business. Following are the assets and liabilities of the...

Problem-4: Accounting in Action

Trixie Maye started her own consulting firm, Matrix Consulting, on May 1, 2018. The following transactions occurred during the month of May Trixie invested $7,000 cash in the business. Paid...

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