Managerial Accounting Is Not Bound by Generally Accepted Accounting Principles

question 101

Essay

Managerial accounting is not bound by generally accepted accounting principles (GAAP)but clearly is influenced by GAAP.How do budgets and the budgeting process demonstrate connections to GAAP?

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Definitions:

Transaction

A financial event that changes the value or composition of a company's assets, liabilities, or equity.

Journal

A chronological record of all financial transactions, used to transfer information to a company's general ledger.

Accounts

Financial records that track the income, expenses, assets, liabilities, and equity of an individual or organization, forming the basis for financial reporting.

Transaction Effects

The impact of business transactions on the financial statements, including assets, liabilities, and equity.