ACCOUNTING PRINCIPLES UNDERLYING CORPORATE FINANCIAL STATEMENTS.
In this article, fundamental propositions concerning the functions of accounting in respect to cost, revenue realization, income, and capital are set forth briefly. These are followed by explanations and applications the list of which could be considerably expanded. The primary effort has been to bring out those points which are of the broadest significance or which have been the object of recent attention. In the corporate field the most important use of accounting lies in the preparation of statements of financial position and of operating results. So many vital decisions of business and government depend on the interpretation of such statements that they have come to be of prime economic and social significance. The subject may be approached by considering the uncertainties of corporate accounting practice which sometimes vitiate comparisons of published financial statements of different corporate enterprises, and even comparisons of the financial statements of the same enterprise for successive years. In some instances business managements and accountants have permitted themselves such freedom of action that published statements have been difficult of interpretation without extensive supplemental information. To avoid these difficulties every corporate statement should be based on accounting principles which are sufficiently uniform, objective, and well understood to justify opinions as to the condition and progress of the business enterprise behind it.
- DOI
- 10.2308/tar-7052034
- Volume
- 22 (1)
- Pages
- 101-107
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref