AICPA American Institute of Certified Public Accountants SEC Securities & Exchange Commission FASB Financial Accounting Standards Board

FASB Financial Accounting Standards Board

GAAP Generally Accepted accounting principles

Three types of Businesses

Cost Principle

Going-concern principle

Entity Concept

Accounting Equation

Principle that requires the assumption that the entity will remain in operation for the foreseeable future

Each entity is an organization that stands apart as a separate economic unit. We do this to not confuse the affairs with those of other entities.

Assets = Liabilities + Owner’s Equity

Accounting guidelines, formulated by FASB, that govern how accountants measure, process, and communicate financial information

Organization PRIMARILY responsible for accounting standards

Work together to formulate accounting standards

Sole Proprietorship Partnership Corporation

Principle that requires an item to be recorded at the price actually paid