Accounting And Professional Principles: Personal Financing And Accounting Principles

In today’s world being able to understand and identify financing and accounting principles is important to a person’s current and future success. One must be grounded by their own principles that are intertwined with the biblical and professional background. This will allow individuals to always keep God first, communicate on a professional level and be able to help others. The following paragraphs will discuss my personal principles, biblical principles and professional principles as pertaining to financial and accounting principles.

Personal financing and accounting principles:

My accounting and financial principles follow a simple four-step process. The first step is to trust Proverbs 3:6 “In everything you do, put God first, and

These assumptions are defined as follows: The entity assumption requires that separate transactions of owners and others not be commingled with the reporting of economic activity for a particular business. The going-concern assumption means that accountants are not constantly assessing the liquidation value of a company in determining what to report unless of course liquidation looks like a possibility. Accountants assume they can divide time into specific measurement intervals (i.e., months, quarters, years). Periodicity assumption is necessitated by the regular and continuing information needs of financial statement users. Monetary unit assumption means that accounting measures transactions and events in units of money. Stable currency assumption, going along as though costs and revenues incurred in different time periods need not be adjusted for changes in the value of the monetary unit over time

Note, however, that recently a fair market value has been playing a significant role in valuing assets and liabilities. Revenue Recognition Principle: This principle requires revenue to be recorded when it is earned and realized or realizable. Matching Principle: This principle states that expenses must be recorded in the same period as the revenues associated with those expenses. Disclosure Principle: This principle requires all companies to fully disclose information that may impact decisions of users of financial information ("What are Generally Accepted Accounting Principles (GAAP)? - Accounting Questions & Answers (Q&A),"