Commercial Accounting and Generally Accepted Accounting Principles

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Commercial Accounting and General Accepted Accounting Principles: Commercial accounting is an accounting principle that is based on profit and loss, which is also known as profit accounting. One of the major aspects of this accounting principle is that the reporting for an organization is directed to its investors. Through the principles of commercial accounting, tax cases judges generally seek to establish whether the profits were computed based on the ordinary commercial principles as the first phase in determining the total amounts of profits ("Tax and Accountancy", n.d.). Therefore, the commercial accounting principles are mainly geared towards identifying what accountants would do in practice. Generally Accepted Accounting Principles (GAAP) are accounting standards that guide accountants in recording and reporting financial information. These standards consist of a wide range of principles that have been designed by the professionals in the field and the Securities and Exchange Commission. Through various enacted laws, the commission has the power to set up the requirements for reporting and disclosure of financial information. The standards within these principles are based on basic assumptions in accountancy used by these professionals that are applicable to most financial statements. Commercial accounting principles and Generally Accepted Accounting Principles basically prescribe the concrete basis of accounting over the cash basis. However, these principles
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