Article review 2 Essay Example | Topics and Well Written Essays - 500 words

Article review 2 - Essay Example rules and concepts that govern the field of accounting as the basic accounting  principles and guidelines that form the basis for Financial Accounting Standards Board (FASB) and the Generally Accepted Accounting Principles (GAAP). The article notes the requirement and importance of using the generally accepted accounting principles in the preparation of financial statements. The GAAP ensures professionalism, consistency,  and uniformity in accounting. However, the article notes that GAAP have become more complex over the years because financial transactions have become more complex. The article recognizes ten basic accounting principles and guidelines that form the basis of the Generally Accepted Accounting Principles. They include the economic entity assumption, monetary unit assumption, time period assumption, cost principle, full disclosure principle, going concern principle, matching principle, revenue recognition principle, materiality, and conservatism principle (Accounting Coach 1). I agree with the article’s position and insight on the basic accounting principles and guidelines for various informed reasons. Indeed, all financial statements must comply with the set rules and standards to reflect professionalism, consistency, and uniformity in accounting. Public organizations must present financial statements to the shareholders and directors quoting the Generally Accepted Accounting Principles used to reach at such financial positions. The use of such principles is significant in accounting since the operations, shareholders, and directors of public companies emanate from all over the world hence the need for a standardized code of accounting to represent the diverse backgrounds of the concerned parties. This is also significant in comparing different public companies. The ten basic accounting principles and guidelines relevantly encompass all the financial aspects and needs of any business entity, big or small. The points discussed in the article,