While many businesses assume that accountants are bound by generally accepted accounting practices and that these are inviolate, nothing could be further from the truth. Everything is subject to interpretation, and GAAP is no different. For one thing, GAAP themselves permit alternative accounting methods to be used for certain expenses and for revenue in certain specialized types of businesses. For another, GAAP methods require that decisions be made about the timing for recording revenue and expenses, or they require that key factors be quantified. Deciding on the timing of revenue and expenses and putting definite values on these factors require judgments, estimates and interpretations.
The mission of GAAP over the years has been to standardize accounting methods in order to bring about uniformity across all businesses. But alternative methods are still permitted for certain basic business expenses. No tests are required to determine whether one method is more preferable than another. A business is free to select whichever method it wants. But it must choose which cost of good sold expense method to use and which depreciation expense method to use.
For other expenses and for sales revenue, one general accounting method has been established; there are no alternative methods. However, a business has a fair amount of latitude in actually implementing the methods. One business applies the accounting methods in a conservative manner, and another business applies the methods in a more liberal manner. The end result is more diversity between businesses in their profit measure and financial statements than one might expect, considering that GAAP have been evolving since 1930.
The pronouncement on GAAP prepared by the Financial Accounting Standards Board (FASB) is now more than 1000 pages long. And that doesn't even include the rules and regulations issued by the federal regulatory agency that jurisdiction over the financial reporting and accounting methods of publicly owned businesses - the Securities and Exchange Commission (SEC).
Summary:
I remember being a kid and looking at the world book encyclopedia. When I would see the world book encyclopedia, It felt like I was looking at all of history. We did not use the world book encyclopedia online in those days, but instead would simply thumb through volume after volume. Looking at too much reference online nowadays, kids miss out on discovering just how vast the information that is out there. There is nothing like a the world book encyclopedia volume – heavy in i...
Keywords:
education,encyclopedia
Article Body:
I remember being a kid and looking at the world book encyclopedia. When I would see the world book encyclopedia, It felt like I was looking at all of history. We did not use the world book encyclopedia online in those days, but instead would simply thumb through volume after volume. Looking at too much reference online nowadays, kids miss out on discovering just how vast the information that is out there. There is nothing like a the world book encyclopedia volume – heavy in itself, and only one of many that make a whole set – to show you how much information there really if that people have decided to research and include. It can really make you feel quite proud of our civilization to understand how much we have accomplished and included in all of our reference books.
Now that I am older, however, I find that I have much less use for the world book encyclopedia. It is not that I have switched to another one or something. Far from it. It is simply that an encyclopedia does not go deep enough into most topics to be worth it on its own. The idea that I had as a kid – that the world book encyclopedia had every bit of information that there was – was not far from what it was actually planned out to do. The philosophers, the French intellectuals who made the first encyclopedia, wanted to include all of human knowledge up to that point in a single collection. They did fail, but what a worthy experiment.
Now, however, we know that there is just too much to fit into a world book encyclopedia, no matter how huge. If you go to a library, you might just be amazed at the sheer amount of stuff that there is lining the shelf. the world book encyclopedia is just one tiny little part of what is a massive collection of info. But, I did buy a world book encyclopedia of my very own, and although I do not use it all that often, I am glad to have it as a reference.
When I want to go deeply into something, I will go to the library, but if I want a brief overview of some area of knowledge, nothing does the trick better than a copy of the world book encyclopedia. If you have not thumbed through one, you should.
If you have kids and they are not that good in school, teach them how to use the encyclopedia and you will see that they do improve in school very fast. You can also use this as a lecture for kids when they go to bed.
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