{"id":84,"date":"2024-09-06T16:46:17","date_gmt":"2024-09-06T16:46:17","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/chapter\/introduction-to-fundamental-concepts-of-u-s-accounting-standards\/"},"modified":"2024-09-06T16:46:17","modified_gmt":"2024-09-06T16:46:17","slug":"introduction-to-fundamental-concepts-of-u-s-accounting-standards","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/chapter\/introduction-to-fundamental-concepts-of-u-s-accounting-standards\/","title":{"raw":"Introduction to Fundamental Concepts of US Accounting Standards","rendered":"Introduction to Fundamental Concepts of US Accounting Standards"},"content":{"raw":"\n

What you'll learn to do: Identify fundamental concepts of Generally Accepted Accounting Principles<\/h2>\nThe objectives of financial reporting, as discussed in the FASB Statement of Financial Accounting Concepts No. 1, are to provide information that:\n
    \n \t
  1. Is useful to existing and potential investors and creditors and other users in making rational investment, credit, and similar decisions;<\/li>\n \t
  2. Helps existing and potential investors and creditors and other users to assess the amounts, timing, and uncertainty of prospective net cash inflows to the enterprise; and<\/li>\n \t
  3. Identifies the economic resources of an enterprise, the claims to those resources, and the effects that transactions, events, and circumstances have on those resources.<\/li>\n<\/ol>\nIn order to provide the best information possible in light of those objectives, GAAP embodies the following high-level guidance:\n
      \n \t
    • Historical cost principles and the monetary unit assumption<\/li>\n \t
    • Economic entity and going concern assumptions<\/li>\n \t
    • Principle of full disclosure<\/li>\n \t
    • And the following additional principles:\n
        \n \t
      • Relevance<\/li>\n \t
      • Reliability<\/li>\n \t
      • Consistency<\/li>\n \t
      • Conservatism<\/li>\n \t
      • Materiality<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","rendered":"

        What you’ll learn to do: Identify fundamental concepts of Generally Accepted Accounting Principles<\/h2>\n

        The objectives of financial reporting, as discussed in the FASB Statement of Financial Accounting Concepts No. 1, are to provide information that:<\/p>\n

          \n
        1. Is useful to existing and potential investors and creditors and other users in making rational investment, credit, and similar decisions;<\/li>\n
        2. Helps existing and potential investors and creditors and other users to assess the amounts, timing, and uncertainty of prospective net cash inflows to the enterprise; and<\/li>\n
        3. Identifies the economic resources of an enterprise, the claims to those resources, and the effects that transactions, events, and circumstances have on those resources.<\/li>\n<\/ol>\n

          In order to provide the best information possible in light of those objectives, GAAP embodies the following high-level guidance:<\/p>\n

            \n
          • Historical cost principles and the monetary unit assumption<\/li>\n
          • Economic entity and going concern assumptions<\/li>\n
          • Principle of full disclosure<\/li>\n
          • And the following additional principles:\n
              \n
            • Relevance<\/li>\n
            • Reliability<\/li>\n
            • Consistency<\/li>\n
            • Conservatism<\/li>\n
            • Materiality<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"author":6,"menu_order":5,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Introduction to Fundamental Concepts of U.S. Accounting Standards\",\"author\":\"Joseph Cooke\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":79,"module-header":"","content_attributions":[{"type":"original","description":"Introduction to Fundamental Concepts of U.S. Accounting Standards","author":"Joseph Cooke","organization":"Lumen Learning","url":"","project":"","license":"cc-by","license_terms":""}],"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/84"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/users\/6"}],"version-history":[{"count":0,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/84\/revisions"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/parts\/79"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/84\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/media?parent=84"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=84"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/contributor?post=84"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/license?post=84"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}