Commercial Accounting Essay Example for Free

Commercial bill EssayCommercial accounting is an accurate account of business transactions, it can only be acquired if two coin and credit transactions are performed, put down, and recognized in such a way that thither can be no duplication and the transactions are recorded under commercial accounting. The carcass known as double meekness book keeping or the commercial accounting system that records both aspects of transactions, also it records credit transactions in cash accounting the day of the receipt. The single entry in accounting for example there is a sale, where the transaction is complete after the exchange of cash for goods. In commercial accounting the date in which the transaction was made needs to be recorded regardless to whether it was paid or it wasnt. Generally Accepted Accounting Principles better known as (GAAP) is the charm of standards and practices that are required to be used by businesss to record and present the results of their pecuniary activ ities and their records of what they owe, established by the Financial Accounting Standards Board (FASB).These accounting principles are standardized and used for the many an(prenominal) private and publicly traded companies in America today. Every economic event within business essential be associated with and recorded by a specific entity and business records must not include the own(prenominal) assets or liabilities of the owner. If an idea holds no impact on a decision maker, investors, or creditors, then the relating (GAAP) principles do not have to be followed. (GAAP) requires the use of accrual priming accounting rather than cash basis accounting, this is imposed on businesses so that investors have a minimum level of consistency in the fiscal statements they use when analyzing businesses for investment purposes. The accrual basis of accounting over the cash basis of accounting in commercial accounting and generally accepted accounting principles (GAAP) is different depen ding on whether you run a macro scale business or a small business.Cash basis is used mostly by small businesses where owners and creditors want a simple way to understand the financial statements and to understand whether there is a profit or loss in the business. Accrual basis is used by large businesses and when revenue is earned expenses are accrued. Cash basis gives you a clear picture of your cash flow, but does not give you a good idea of business in the long term because you are not recording income when it is actually earned. Accrual basis accounting accurately matches your income and expenses and if not managed carefully you could lose running play of your actual cash flow, with accrual basis transaction statements they are recorded in which the events occur. You dont have to wait until you see the money, or actually pay money out of your checking account, to record a transaction.References(Investopedia.com)(Wiley PLUS)