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Week 3: GAAP This week we will explore Chapter(s) 5 and 6 of the textbook. Chapter 5 reviews the accounting cycle and details completion of the worksheet, financial statements, adjusting entries, and...

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Week 3: GAAP
 
This week we will explore Chapter(s) 5 and 6 of the textbook.  Chapter 5 reviews the accounting cycle and details completion of the worksheet, financial statements, adjusting entries, and closing entries. Additionally, the chapter explains the classified balance sheet and use of the cu
ent ratio.  Chapter 6 stresses accounting theory and discusses assumptions and concepts that are the foundation of accounting.
Week 3: Lesson Objectives
Chapter 5
· Summarize the steps in the accounting cycle.
· Prepare a work sheet for a service company.
· Prepare an income statement, statement of retained earnings, and balance sheet using information contained in the work sheet.
· Prepare adjusting and closing entries using information contained in the work sheet.
· Prepare a post-closing trial balance.
· Describe the evolution of accounting systems.
· Prepare a classified balance sheet.
· Analyze and use the financial results—the cu
ent ratio.
Chapter 6
· Identify and discuss the underlying assumptions or concepts of accounting.
· Identify and discuss the major principles of accounting.
· Identify and discuss the modifying conventions (or constraints) of accounting.
· Describe the conceptual framework project of the Financial Accounting Standards Board.
· Discuss the nature and content of a company's summary of significant accounting policies in its annual report.
Reading and Resources
Our reading for Week 3 includes Chapter(s) 5 and 6 of the textbook.  Pay particular attention to the sections titled "Key Terms" throughout the reading.  They provide a great way for us to see how what we are learning can be applied in the workplace.  The "Understanding the Learning Objectives" section found at the end of the chapters are also a great way to be sure you understand what you have covered and can apply it to solve problems. 
 
Accounting Principles: A Business Perspective, Financial Accounting (Chapters 1-8)
James Don Edwards, Roger H. Hermanson, and Bill Buxton
 
In addition to the required course text, the following public domain websites and video links are useful. Please abide by the university’s academic honesty policy when using Internet sources. Note website and video addresses are subject to change.
· American Psychological Association (APA) Style Website
· Purdue Online Writing La
· YouTube Video on Formatting an APA Style Pape
· Microsoft Office Training Website
· YouTube Videos on Microsoft Excel for Beginners
· Turnitin Website
· principlesofaccounting.com
· NetMBA.com
Answered Same DayDec 16, 2021

Solution

Nitish Lath answered on Dec 17 2021
53 Votes
The Generally accepted accounting principle can be defined as the set of rules which needs to be followed in the financial reporting of any entity. In other words it provides guidelines for recognizing various items, disclosing the information and preparing the financial statement (Alicia Tuovila2019). These standards determine the
oad guideline for the both general purpose and detailed standards. Thus when presenting financial accounting information the accountants must consider the five major generally accepted accounting principles (GAAP) which includes:
1) Cost Principle: This principle deals with the historical cost of any transaction and refers to the cash or a cash equivalent which was...
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