Running head: General Accepted Accounting Principles

General Accepted Accounting Principles
Nahir Perez-Montero
University Of Phoenix
Financial Resource Management
Debbie Vaughn
June 06, 2011

General Accepted Accounting Principles

    Generally Accepted Accounting Principles, or as commonly known by accountants, GAAP is a term given to a set of standards and guidelines with the intent to facilitate organizations with clear financial accounting information in their specific jurisdiction. These so-called, standards, conventions, and bylaws are used by accountants for record keeping and create transactions, and to prepare pertinent financial statements required by other organizations or individuals of interest (Cleverly, Song, & Cleverly, 2011). The GAAP in accounting are simple and can be used by different organizations where many of their accountants prefer to use them because they are very detailed and provide useful guidance in the production of results and consequently transactions and financial statements. It is important to mention that these accounting principles have been developed by individuals in the accounting profession and guarded by the Securities and Exchange Commission (SEC) and the Governmental Accounting Standards Board (GASB) establishes its requirements for state and local governments.
    The big question to be considered in relationship with healthcare is if the legal status of a healthcare organization be determined by government financial and reporting requirements, or should healthcare itself operate it, and determine the accounting and reporting requirements on its own.

    The set of GAAP fall under specific definitions and are strategically created with intent behind each of them (Edwards and Barrack, 1999). There are other principles and sometimes called assumptions but for the purpose of the paper below are the most commonly used.
  1. Regularity: This principle conforms to enforced...