The Structure Is Based Upon Generally Accepted Accounting Principles

1259 Words Apr 22nd, 2015 6 Pages
The structure is based upon generally accepted accounting principles (i.e. GAAP). It is focused on utilizing a double entry system to understand what is happening and serve as a way of rechecking the information. The sources of it include: the total debt, liabilities, revenues and credits. This helps actuaries to determine where possible errors occurred and how to correct them. The business accounts are showing the relationship the nonprofit has with suppliers and financial institutions. To effectively control the budget, these organziations will use the double entry accounting system. This helps them to monitor the inventory and recheck for any kind of issues inside the specific practices at a certain hotel. There are not large variances from the budgeted to actual figures. This is because the firm uses the GAAP method to book revenues when they were actually received. These procedures reduce the possibility of misstating estimates and it ensures that the financial information is as accurate as possible. However, recent changes in accounting standards for all organizations is leading to more firms embracing IFRS standards. In the next five years, there is a very realistic possibility of a total convergence in accounting standards and the implementation of them. This is because nonprofits are becoming more globalized and have a number of investors from around the world. At the same time, the lingering effects of the financial crisis are showing how there needs to be…
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