The Different Kinds of Accounting Systems
If everyone involved in the practice of accounting implemented their unique system, or no system at all, there’d be no way to truly tell whether a business was profitable or not. Nearly all companies follow what are called generally accepted accounting principles, or GAAP, and there are huge tomes in libraries and bookstores devoted to just this one topic. Everyone can presume that a firm has used the GAAP system unless they specifically state otherwise. When GAAP methods are not used the company needs to make clear which other form of accounting they have used and are banned from using misleading titles in their financial statements. Most accountants consider GAAP the gold standard for financial statements and summaries. Not disclosing that it has used principles other than GAAP makes a company legally liable for any misleading or misunderstood data. GAAP methods have been fine-tuned over many decades and bascially created a whole way for the financial systems of companies to work. There are a number of other financial reporting systems which are used for other types of business type such as governments, charities and not for profit companies.
Go to visioneer scanners for more info.