Basic Accounting Concepts

Explaining Basic Accounting Concepts and Business Structures

Explaining Basic Accounting Concepts and Business Structures
Good information is the basis of accounting.   Development in accounting practices has led to valuable information from the standardization boards for accounting principles.   Different types of companies use these standards to keep financial records for their businesses.
Four sources of generally accepted accounting principles (GAAP) are the Securities and Exchange Commission (SEC), American Institute of Certified Public Accounts (AICPA), Financial Accounting Standards Board (FASB) and Government Accounting Standards Board (GASB).
The SEC involvement with accounting standards dates back to the stock market crash in 1929.   The United States government creates the SEC to regulate the accounting practices of American companies.   The SEC oversees the accounting principles that publicly traded companies use.   They use the private sector to establish the accounting principles and the SEC regulates the principles the private sector establishes.
The AICPA and the FASB are two of the private sector groups that establish the GAAP.   From 1939 to 1959, the AICPA establishes Accounting Research Bulletins to give guidelines for accounting.   The Accounting Principles Board (APB) was later put in place to give the accounting principles a structure accountants could follow.   The FASB was put in place after the APB was later found to have a lack of productivity and failure to respond soon enough to accounting abuse (Kieso, Weygandt, & Warfield, 2007).   The FASB has a structure allowing it to work more efficiently and be unbiased toward an individual company.   They also have a wider representation because there are more than only certified public accounts are a part of the board.   The GASB is another board similar to the FASB.   The GASB came in to play as a board for government accounting.  
The FASB assembles all parts of GAAP, calling it the Accounts...