The Accounting Principles Board (APB) was a private organization that was active from 1959 to 1973. Its purpose was to issue accounting standards that would be generally accepted in the United States. The APB was superseded by the Financial Accounting Standards Board (FASB).
Why was APB replaced?
The short answer is that APB was replaced because it was not working as intended. The long answer is that there were a number of reasons why APB was not working, including:
-The high cost of living in the Bay Area
-The lack of affordable housing
-The difficulty of recruiting and retaining officers
-The high rate of crime
-The perception that the police were not doing enough to solve crimes
APB was replaced with a new police chief who is focused on community policing and building relationships with the community.
What are accounting principles?
The generally accepted accounting principles (GAAP) are a set of rules and guidelines that companies use to maintain and report their financial statements. The Financial Accounting Standards Board (FASB) is the main organization that develops and maintains GAAP.
There are 10 basic principles that make up GAAP:
1. Principle of regularity: Companies should follow GAAP rules and guidelines on a consistent basis from one period to the next.
2. Principle of conservatism: When in doubt, companies should err on the side of caution and choose the option that will result in the lower reported income.
3. Principle of accruals: Companies should recognize revenue and expenses when they are earned or incurred, regardless of when the cash is actually received or paid.
4. Principle of full disclosure: Companies should disclose all relevant information that could reasonably impact a reader’s understanding of the financial statements.
5. Principle of going concern: Companies should assume that they will remain in business for the foreseeable future and make decisions accordingly.
6. Principle of materiality: Companies should only disclose information that is material, or significant.
7. Principle of consistency: Companies should use the same methods and assumptions from one period to the next, unless there is a good reason to change them.
8. Principle of dollar-unit: Companies should express all amounts in terms of U.S. dollars.
9. Principle of duality: Every transaction has two effects, a debit and a credit.
10. Principle of periodicity: Financial statements should be prepared on a periodic basis, typically quarterly or annually. What are the 5 basic accounting principles? The 5 basic accounting principles are:
1. The revenue recognition principle
2. The matching principle
3. The disclosure principle
4. The materiality principle
5. The conservatism principle