Determining organizations that govern accountingSuppose you are starting a business, Wholly Shirts, to imprint logos on T-shirts. In organizing the business and setting up its accounting records, you take your information to a CPA to prepare financial statements for the bank. Name the organization that governs the majority of the guidelines that the CPA will use to prepare financial statements for Wholly Shirts. What are those guidelines called?

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Asked Dec 14, 2019
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Determining organizations that govern accounting

Suppose you are starting a business, Wholly Shirts, to imprint logos on T-shirts. In organizing the business and setting up its accounting records, you take your information to a CPA to prepare financial statements for the bank. Name the organization that governs the majority of the guidelines that the CPA will use to prepare financial statements for Wholly Shirts. What are those guidelines called?

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Accounting: Accounting refers to the information system, where the economic activities of a business entity are measured, and converted into reports, that are communicated to its users, for taking informed decisions.

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In this case, the CPA would use the guidelines set by the Financial Accounting Standards Board (FASB) to prepare the financial statements of W shirts, to be presented to the bank. FASB is a privately funded entity, who is responsible for creating, and governing the accounting standards in the Country U. These accounting standards and guidelines are called the Generally Accepted Accounting Principles (GAAP) that are formulated, and oversees by the FASB. GAAP relies on a conceptual frame work that dictates the objectives, characteristics, and elements, to prepare and present the financial statements, and establishes the acceptable accounting practices.

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