Commercial Accounting Essay

Commercial report is an accurate account of business legal proceeding, it can only be acquired if both cash and acknowledgment transactions are performed, recorded, and recognized in such a way that there can be no duplication and the transactions are recorded under commercial accountancy. The system known as replicate entry book keeping or the commercial accounting system that records both aspects of transactions, also it records credit transactions in cash accounting the day of the receipt. The single entry in accounting for case there is a sale, where the transaction is complete after the exchange of cash for bang-ups. In commercial accounting the date in which the transaction was made needs to be recorded regardless to whether it was paid or it wasnt. Generally Accepted Accounting Principles better known as (GAAP) is the collection of standards and practices that are required to be used by businesss to record and present the results of their financial activities and their records of what they owe, established by the financial Accounting Standards Board (FASB).These accounting principles are standardized and used for the many private and publicly traded companies in America today. Every economic event within business must be associated with and recorded by a specific entity and business records must not include the personal assets or liabilities of the owner. If an idea holds no impact on a decision maker, investors, or creditors, then the relating (GAAP) principles do not have to be followed. (GAAP) requires the use of accruement basis accounting rather than cash basis accounting, this is imposed on businesses so that investors have a minimum level of consistency in the financial statements they use when analyzing businesses for investment purposes. The accruement basis of accounting over the cash basis of accounting in commercial accounting and chiefly accepted accounting principles (GAAP) is different depending on whether you run a large scale business or a small business. specie basis is used mostly by small businesses where owners and creditors want a simple way to understand the financial statements and to understand whether there is a profit or handout in the business. assemblage basis is used by large businesses and when revenue is earned expenses are accrued. Cash basis gives you a clear picture of your cash flow, but does not give you a good idea of business in the long term because you are not recording income when it is actually earned. Accrual basis accounting accurately matches your income and expenses and if not managed carefully you could lose track of your actual cash flow, with accrual basis transaction statements they are recorded in which the events occur. You dont have to wait until you trip up the money, or actually pay money out of your checking account, to record a transaction.References(Investopedia.com)(Wiley PLUS)