Can you please explain the 4 topics in the screen shot and provide an example of each. Currently Struggling a bit • Application of Generally Accepted Accounting Principles (GAAP) (e.g., matching principle,conservatism principle, realization principle) in the accounting cycle;• Demonstration of the relationship between GAAP and accounting practices (e.g., matchingprineiple and adjusting entries, cost principle and asset valuation);• Analysis of the financial status of a company (e.g., liquidity, solvency, profitability) by usinghorizontal and vertical analysis;• Analysis of the financial status of a company, using financial ratios (e.g., turnover ratios, bookvalue, earnings per share, times interest earned, return on assets).

Answered: Application of Generally Accepted…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Can you please explain the 4 topics in the screen shot and provide an example of each. Currently Struggling a bit

• Application of Generally Accepted Accounting Principles (GAAP) (e.g., matching principle,
conservatism principle, realization principle) in the accounting cycle;
• Demonstration of the relationship between GAAP and accounting practices (e.g., matching
prineiple and adjusting entries, cost principle and asset valuation);
• Analysis of the financial status of a company (e.g., liquidity, solvency, profitability) by using
horizontal and vertical analysis;
• Analysis of the financial status of a company, using financial ratios (e.g., turnover ratios, book
value, earnings per share, times interest earned, return on assets).

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In order to prepare the financial statements, there is certainly common practices or rules which are required to be followed, such common rules or practices are known as GAAP

Some principles of GAAP