The Accounting Principles And Procedures - 927 Words

When a company reports its financial reports, the information is expected to be reliable, verifiable, consistency, and comparability when applying accounting principles and procedures. The accounting principles and procedures directly affect the company’s balance sheet and it financial statement by depending on hot it’s prepared and interpreted. If there are any changes in the accounting principles and procedures when preparing the financial statements, it should be notified and documented any changes that made to the company’s accounting practices. Therefore, this paper is going to address about a company that has decided to change its accounting method of depreciation to a declining balance method and weather its decrease net income or not, results of changes in principle or estimate, importance of choosing the accounting methods, and the influence of errors and corrections in the financial statements. Changing Depreciation method to a Declining Balance Method The straight-line method has always used by the company, but recently the company decided to change its method of depreciating long term assets to be consistent with major competitors, which use a declining-balance method. However, this change will cause past expenses to be higher and income to be lower. It is important to remember that net income from continuing operations will decrease at the time of recognition; meaning in the future depreciation expense will decrease, but in a long run it will increase whenShow MoreRelatedPrinciples and Assumptions Used in Preparing Accounting Statements1605 Words   |  7 PagesIntroduction 1. definition of accounting: [2] *Accounting is a set of principles and procedures relating to the registration and compilation, analysis and interpretation of financial data for the purpose of determining the outcome of business and its financial position. * A method of recording and tabulating and summarizing operations and financial events and then interpret the results. *Body: 2.Assumptions used in accounting: [1] What assumptions used in accounting is generally predict solutionsRead MoreAccounting Regulatory Agencies1280 Words   |  6 PagesACCOUNTING REGULATORY AGENCIES Introduction Accounting standards are needed so that financial statements will fairly and consistently describe financial performance. 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