Theu.s. Securities And Exchange Commission ( Sec )
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GAAP is known as Generally Accepted Accounting Principle, and it is an accounting standard used in the US approved by the U.S. Securities and Exchange Commission (SEC). On the other hand, IFRS is an International Financial Reporting Standards. It is an accounting standard that is commonly used in many parts of the world such as the European Union, Asia, and South America, and some of the U.S companies slowly adopt IFRS(Diffen). The purpose of IFRS to create a universal accounting rule or common language for businesses to understand especially for a foreign investor to understand international accounting standard or the same accounting language. It is considered to be opened an opportunity for new capitalist countries, for instance, China.…show more content… as a result, gross profit is $71,047. The net income for the year is $9,129 which mean that Ruckman makes a profit.
Table 2 is a balance sheet of Ruckman. It displays the information about the company’s financial. Balance Sheet consisted of Assets, Liabilities, and Shareholder’s Equity the Balance sheet has to always be balanced. the formula is Assets = Liabilities + Shareholder’s Equity. therefore, Liability and owner’s Equity has to be equal to Assets. Assets are the value that owns by Ruckman, Inc company own which has total assets of $235,897. the total of current liability is $84,419 is the amount that Ruckman, Inc owes to other people. Total equity is $151,478 . This number is the amount of the contribution that shareholder, owner, and partner contributed to business in order to direct investment or reinvest in the business by leaving profit inside the company. Hence, the total liability and shareholder’s equity are $235,897. since the total liability and shareholder’s equity and total Assets are equal, indicate that the Balance sheet is balance because the amount of Assets is equal to liabilities plus Shareholders’ Equity.
Table 3 is s Statement of Cash flows. Based Ruckman company 's Statement of cash flows, it is considered to be an indirect method , as the Statement of cash flows shows the activity of net income first and will make adjustments later in order to reconcile cash flow from the operating activities. This