Generally accepted accounting principles (GAAP) are a set of rules that encompass the details, complexities, and legalities of business and corporate accounting. The Financial Accounting Standards Board (FASB) uses GAAP as the foundation for its comprehensive set of approved accounting methods and practices.
Per generally accepted accounting principles (GAAP), companies are responsible for providing reports on their cash flows, profit-making operations and overall financial conditions. There are three major financial statements required under GAAP:
- Income statement
- Balance sheet
- Cash flow statement
Presentation of the Financial Statements in accordance with GAAP is governed by Accounting Standards Codification (ASC) Topic The Standard defines the following as a full set of financial statements:
- Financial position at the end of the period
- Earnings, which may be shown in a separate statement or within one continuous statement of comprehensive income
- Comprehensive income for the period in one statement or two consecutive statements
- Cash flows during the period
- Investments by and distributions to the owners during the period
Publication Date: May 2023
Designed For
Accounting, Finance and operational personal interested in having a stronger understanding of the financial statement process. This includes sole proprietors and owners of businesses
Topics Covered
- The purpose and composition of GAAP principles
- GAAP principles and the presentation of:
- Balance sheet
- Income statement
- Statement of comprehensive Income
- Cash flow statement
- Aspects of ASC 205 as it relates to financial statements
Learning Objectives
- Recognize generally accepted accounting principles (GAAP) and the presentation of balance sheet assets, liabilities and equity
- Recognize GAAP principles and the presentation of income through revenue, expenses and net income/loss
- Recognize GAAP principles and the presentation of the statement of comprehensive income
- Identify GAAP principles and the presentation of the cash flow statement including sections of operating activities, investing activities and financing activities
- Identify the aspects of ASC Topic 205 for presentation of the financial statements in accordance with GAAP
- Identify the organization that influences GAAP and has the power to regulate financial markets and accounting standards
- Identify the type of account that is increased by a debit
- Identify the type of activity that is listed first on the statement of cash flows
- Identify the section of the statement of cash flows that buying and selling PP&E should be included in
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Auditing (2 hours)
Program Prerequisites
None
Advance Preparation
None
Instructor
Lynn Fountain
Lynn Fountain has over 38 years of experience spanning public accounting, corporate accounting and consulting. 20 years of her experience has been working in the areas of internal and external auditing and risk management. She is a subject matter expert in multiple fields including internal audit, ethics, fraud evaluations, Sarbanes-Oxley, enterprise risk management, governance, financial management and compliance. Lynn has held two Chief Audit Executive (CAE) positions for international companies. In one of her roles as CAE, she assisted in the investigation of a multi-million-dollar fraud scheme perpetrated by a vendor that spanned 7 years and implicated 20 employees. The fraud was formally investigation by the FBI and resulted in 5 indictments estimating a $13M fraud loss.
Ms. Fountain is currently engaged in her own consulting and training practice. She is a highly sought-after trainer and international speaker. In addition, Ms. Fountain has assisted numerous companies with enterprise risk management frameworks, internal audit processes and financial accounting. She also serves as a discussion leader for the AICPA for numerous classes finance, accounting and risk management topics.
Ms. Fountain is the author of three separate technical books. Her first book released in 2015 by the Institute of Internal Auditors Foundation is entitled “Raise the Red Flag – The Internal Auditors Guide to Fraud Evaluations”. Her second book “Leading the Internal Audit Function” was released in October 2015 by Taylor & Francis Publications. This book serves as the initial launch for a series of leading practice internal audit and information technology publications. Her third book “Ethics and the Internal Auditor’s Dilemma” was released in December 2016.
Ms. Fountain obtained her BSBA from Pittsburg State University and her MBA from Washburn University in Kansas. She has her CPA, CGMA, CRMA credentials.