I love your effectiveness and humility in explaining these principles. I must have viewed a dozen of videos and I had to turn off some halfway. It was until yours that you pitched them with simplcity, clarity and they actually made sense to me. Thank you again. I look forward to watching your accrued method video. You rock!
Saying that we know more than we know..true! I have an interview for our accounting department and this is helping my past knowledge gel in my mind. Thank you for this video!
thank you for explaining this in such a way that us regular people can understand. this is about the 6th video I watched and other videos videos talk in such a way that the person watching has to have at minimum a basic understanding of accounting. this video explained GAAP in a way that us normal people can understand. thank you for that. the only thing that would have made this any more informative to those of us with zero accounting background is to add graphical examples. great video though. thank you.
Matching principle works for artists and teachers - purchasing tools, materials, etc. that will be used for an upcoming or future project, but are not necessarily an expense until that project commences. Or at least that's the way I have understood it.
I'm late to catching this video, but I've been doing a lot of research toward a bookkeeping certification, and I have some examples of how the matching principle applies. One example is prepaid expenses like maybe insurance on a property or a vehicle. Rather than record the entire expense for the insurance in the first accounting period, you spread it out over its lifetime, releasing the expense piecemeal to your income statement. Another example is when selling goods: when you record revenue you need to record the reduction in inventory, that reduction then hits your "cost of goods sold" account which is an expense, within the same accounting period. And a third example is depreciation: when you purchase a fixed (non-current) asset like manufacturing equipment, you don't want to incur the entire expense in the first accounting period, but spread out over the asset's useful life, so you depreciate over time and release the depreciation as an expense to your income statement.
The matching expenses would be prepaid expenses like insurance or rent. If a client pays a year in advance on Nov 1st, a journal entry is needed on Dec 31st to show that only 2 months of that transaction has been used.
To put it simply, you are including money owed to you and money you owe. For example you sell someone something and invoice them. You would recognize a revenue (credit) and add to your accounts receivable (debit). The buyer would recognize the item received (debit an asset) and the amount due goes into accounts payable (credit).
Matching Principles might be for a service shop for example, that the parts are purchased as stock but not towards revenue until their installed in the car and the R/O is closed out.
yeah its not a cost until you can tie how much you used to produce something to sell, we did this and its because its wip at this stage, and so what is not used on a product to sell is still stuck in inventory, only put down costs it took per unit to sell, the rest not used is in inventory as WIP. or else said number of items at a certain time sold would have a humongous costs of all inventory bought tied to it.
Thank you for audio. I want to start a bookkeeping business but I don't know how to get started. Can you please help me! I have a degree in accounting, an MBA in Finance from Sierra Leone, West Africa and looking forward to be a CPA license holder.
Hi David! Check out this video that Morgan made on cash vs accrual (ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-Ssnjs9UiZ2Q.html). Hope this helps! Krista (FinePoints Admin)
Are the generally accepted accounting principles published by any central authority for the accounting profession? Does each states board of accountancy have its own definition of what constitute generally accepted accounting principles? Are these principles simply a matter of long-standing practice and for lack of a better term, tradition?
are these the same rules GAAP? im really confused about their names 1. Principle of Regularity: GAAP-compliant accountants strictly adhere to established rules and regulations. 2. Principle of Consistency: Consistent standards are applied throughout the financial reporting process. 3. Principle of Sincerity: GAAP-compliant accountants are committed to accuracy and impartiality. 4. Principle of Permanence of Methods: Consistent procedures are used in the preparation of all financial reports. 5. Principle of Non-Compensation: All aspects of an organization's performance, whether positive or negative, are fully reported with no prospect of debt compensation. 6. Principle of Prudence: Speculation does not influence the reporting of financial data. 7. Principle of Continuity: Asset valuations assume the organization's operations will continue. 8. Principle of Periodicity: Reporting of revenues is divided by standard accounting periods, such as fiscal quarters or fiscal years. 9. Principle of Materiality: Financial reports fully disclose the organization's monetary situation. 10. Principle of Utmost Good Faith
Hi, is it feasible to work on MacBook while doing bookkeeping tasks ? I am askin because most of the accounting work requires use of MS excel and it is bit difficult to use MS excel on MacBook due to different keyboard set ups
Yes, you can absolutely use MacBook. Do you have a Google account? You can use the Google version of Excel, and it's great because you can take it anywhere you go! -Gabe (FinePoints Admin)
Hi Ms. Morgan, I wonder if you're looking for a trainee to help you with your bookkeeping business for free in exchange for experience as an online bookkeeper for US accounts. Thanks in advance.
Thank you for reaching out to ask about working with Morgan. At this time Morgan is not looking to bring on additional help, but what a great idea to try and find a bookkeeper you could train with to gain experience! -Gabe (FinePoints Admin)
