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This course focuses on the GAAP principles for proper preparation of financial statements. We highlight the concepts in ASC 205 regarding presentation of those financial statements.

Generally accepted accounting principles (GAAP) are a set of rules that encompass the details, complexities, and legalities of business and corporate accounting.  The Financial Accounting Standards Board (FASB) uses GAAP as the foundation for its comprehensive set of approved accounting methods and practices. 

Compliance with these GAAP principles is built on three rules that aim to eliminate misleading accounting and financial reporting practices. These rules create consistent accounting and reporting standards which provide prospective and existing investors with reliable methods of evaluating an organization’s financial standing. They include:

  • The basic accounting principles, assumptions and considerations. 
    • Assumptions are considered a statement that is presumed to be true without concrete evidence to support it.  
    • Considerations are areas that govern the accountant’s ability to make decisions.
    • Principles are the rules and guidelines that companies must follow when reporting financial data.  These principles include: cost, disclosure, going concern, matching, revenue recognition, professional judgment, and conservatism
  • Rules and standards issued by the FASB and its predecessor, the Accounting Principles Board (APB)
  • Generally accepted industry practices

Per GAAP, companies are responsible for providing reports on their cash flows, profit-making operations and overall financial conditions. There are three major financial statements required under GAAP: 

  • Income statement 
  • Balance sheet 
  • Cash flow statement

Presentation of the Financial Statements in accordance with GAAP is governed by Ac­count­ing Standards Cod­i­fi­ca­tion (ASC) Topic 205, Pre­sen­ta­tion of Fi­nan­cial State­ments. The Standard defines the following as a full set of financial statements:

  • Financial position at the end of the period
  • Earnings, which may be shown in a separate statement or within one continuous statement of comprehensive income
  • Comprehensive income for the period in one statement or two consecutive statements
  • Cash flows during the period
  • Investments by and distributions to the owners during the period.

Note: This course is also a part of The Controllership Series.

 

Note: Information within this course comes from readily available public domain documents and is utilized by the trainer as a supplement for relaying the course content.

Learning Objectives

  • Explore the history of generally accepted accounting principles (GAAP) and recognize why the accounting and GAAP principles are of strategic importance to the accounting profession.
  • Discover the GAAP assumptions, principles and considerations and their application.
  • Discover the GAAP rules and standards.
  • Discover how to apply GAAP principles, assumptions, and considerations to the financial statements.
Last updated/reviewed: May 22, 2022

Included In Certifications

This course is included in the following Certification Programs:

14 CoursesProfessional Bookkeeping Certification

  1. Bookkeeping: Terminology and Process Execution
  2. Bookkeeping: Debits And Credits
  3. Bookkeeping: Cash vs. Accrual
  4. Bookkeeping: Payroll And Expenses
  5. Bookkeeping: Legal Entity And Chart Of Accounts
  6. Bookkeeping: Journals, Subsidiary Ledgers and General Ledger
  7. Bookkeeping: Responsibilities
  8. Bookkeeping: Fixed assets and inventory
  9. Bookkeeping: Accounts Payable/Accounts Receivable And Receipts
  10. Management Internal Control Essentials
  11. GAAP Principles, Assumptions and Considerations
  12. GAAP Presentation of Financial Statements
  13. Bookkeeping Basics – Case Study Scenario
  14. Useful Bookkeeping Tools

18 CoursesFinancial Statement Preparation, Reporting and Auditing Certification

  1. Financial Statement Introduction
  2. GAAP Principles, Assumptions and Considerations
  3. GAAP Presentation of Financial Statements
  4. Management Discussion and Analysis (MD&A) Update
  5. Sarbanes Oxley (SOX) Overview
  6. Sarbanes-Oxley Section 302: ICFR
  7. XBRL (Extensible Business Reporting Language) Introduction to Basics - Updated
  8. XBRL - Connection to SOX 302/404 and Critical Roles
  9. Analyzing Financial Ratios - Solvency, Liquidity and Debt
  10. Analyzing Financial Ratios - Leverage
  11. Analyzing Financial Ratios - Performance And Efficiency
  12. Conducting An Audit In Accordance With GAAS - Part 1
  13. Conducting An Audit In Accordance With GAAS - Part 2
  14. Conducting An Audit In Accordance with GAAS - Part 3
  15. Introduction to Accounting for Income Taxes Based on Income
  16. Practical Application For Accounting For Income Taxes Based On Income Part 1
  17. Practical Application For Accounting For Income Taxes Based On Income Part 2
  18. FASB Codification Research System

17 CoursesThe Controllership Series Certification

  1. The Controllership Series: The Controller Function - Elevating the Role
  2. The Controllership Series: The Controller Function - Strategic and Annual Planning
  3. GAAP Principles, Assumptions and Considerations
  4. The Treasury Function Part 1: Cash, Liquidity and Investments
  5. The Controllership Series: The Controller Function - Cash and Investments
  6. ASC 842 Accounting for Leases - Deep Dive
  7. Revenue Recognition (ASC Topic 606) Standard Overview
  8. The Controllership Series: The Controller Function - Inventory Part 1
  9. The Controllership Series: The Controller Function - Inventory Part 2 - Inventory Valuation, Physical Inventory Methods and Inventory fraud
  10. The Controllership Series: Overhead, Direct and Indirect Costs and Allocation Methods
  11. The Controllership Series: Financial Statement Preparation and Presentation
  12. Analyzing Financial Ratios - Leverage
  13. Analyzing Financial Ratios - Performance And Efficiency
  14. Analyzing Financial Ratios - Solvency, Liquidity and Debt
  15. The Controllership Series: The Financial Close Process
  16. The Controllership Series: Managerial Accounting Basics and Cost Principles
  17. Tools for The Controllership Series Certificate

91 Reviews (432 ratings)Reviews

4
Anonymous Author
The course gave me a quick overview of Gaap principles, assumptions, and considerations. It was quick and easy to follow. I will recommend it.
5
Member's Profile
This was a very confusing one. I finally passed when I answered one question which seemed again what the material and I understood. It was question six. I disagree that it should be answer A. A going concern is considered when a company has issues about going a year from the opinion letter date.
5
Anonymous Author
In addition to the history of GAAP and some major expectations required of accountants, I learned from this course about GAAP assumptions, principles, considerations, and their applications to the balance sheet, income statement, cash flow statement, and shareholder's equity statement.
5
Anonymous Author
Excellent refresher course on GAAP principles, assumptions and considerations - perfect for anyone in the accounting profession who reads or prepares GAAP-based financial statements. The videos and slide handouts were of great quality and provided sufficient depth. I highly recommend!
5
Anonymous Author
I appreciate the history and evolution of GAAP and how to differentiate between principles, assumptions and considerations...quite helpful! The time dedicated for each section was appropriate. Perhaps include example of the SCF and what an investor would be interested in seeing.
4
Anonymous Author
Course was very foundation and conceptual in nature. Good history sprinkled throghout kept my interest piqued during the video lectures. The slides have a lot of information in them so they are better to dig into when you want more info on a topic.
4
Member's Profile
Didn’t really understand to much because I didn’t have any previous knowledge but I understood all the questions when I took the exam. The people to gain the most would be a accountant or someone how is trying to improve accounting techniques
5
Member's Profile
Lynn this was very helpful to me in brushing up on GAAP. We are going from Compilation to Review and I needed to bone -up on GAAP. Thank you for a wonderful and comprehensive presenation. I am a big fan of your courses. Larry
5
Anonymous Author
Great introduction course to GAAP to understand the need, rules, organizations involved in creating, monitoring and enforcing set rules. Anyone involved in the Accounting process would benefit from this course.
4
Anonymous Author
Great review course if you current position / responsibilities do not involve these activities. Most large companies silo accounting from financial reporting, this course helps to connect those activities.
5
Anonymous Author
Good overview of history and foundational principles of GAAP, with helpful examples of how these rules and guidelines are put into practice when preparing a company's core financial statements.
5
Anonymous Author
Excellent overview of the history of the Accounting Authority. Updated knowledge of the happenings in the field of accounting - i.e. Revenu Recognition. Good for a refresher for all CPA's.
4
Anonymous Author
A nice historical pre-face that almost wasn't covered in pre-view and/or test. Course is nice but wordy, a different form of presentation would be more efficient (table, flow chart etc).
5
Anonymous Author
I thoroughly enjoyed this brush up on terms. It's more of a terms CPE course, but it was a good refresher on how GAAP is divided into the principles, assumptions and considerations.
4
Anonymous Author
This course is a good summary of GAAP and its history. As with each of the courses that I have taken, it is very helpful that you can print the slides and add additional notes.
5
Anonymous Author
I thought the course was easy to comprehend and not to complex. The instructor gave detailed information that was easy to understand and not too much crammed into each section.
4
Member's Profile
Helpful for bookkeeping certification. I liked how the instructor used real life examples to explain certain concepts. It really helped me since I am a visual learner.
5
Anonymous Author
This course provides a quick rundown on the history of GAAP, who first adopted it, and why the principles, considerations, and assumptions exact in the industry.
5
Anonymous Author
This was a great course for reviewing/gaining an understanding of GAAP principles and how to apply them to financial reporting. Highly recommend this course!
5
Member's Profile
Excellent refresher course. The COurse is easy to follow and understand and provides the history of accounting standards that is not always highlighted.
3
Anonymous Author
This module was very high level. It does not provide many in the weeds detail. Overall, the course did make me think about a few things to refresh upon.
5
Member's Profile
The concept of GAAP was detailed and clearly explained the expectations Accountants in the reporting of Financial statement. FASB was well understood
5
Anonymous Author
Great course for beginners as well as a good refresher for established professionals. Instructor is knowledgeable and well organized in presentation.
5
Anonymous Author
Very difficult but also very useful course that taught some key concepts which is helpful for someone who does not work in the profession day-to-day.
5
Anonymous Author
This is a great course in providing a basic understanding on fundamental principles behind the preparation of financial statements under US GAAP.
3
Anonymous Author
Course isn't for seasoned CPAs since these are relatively basic concepts. Good for college students in understanding some basic principles
5
Anonymous Author
Very enjoyable course. The instructor has a great deal of knowledge and presents the topics, as well as the associated examples clearly.
5
Anonymous Author
Good brief history and background of GAAP and the principles they created in order to combat what occurred during the Great Depression.
4
Anonymous Author
Very good summarization of GAAP foundational concepts. Mobes at a good pace and is insightful, I would recommendthis course to others!
5
Member's Profile
Informative and clear. Covered all the bases. Enjoyed the course. Good information for understanding why we adhere to the principles.
5
Member's Profile
Getting close to completing my certificate. This was tougher but very helpful. Looking forward to more explanation of the FS and BS.
5
Anonymous Author
This is great for a new accountant, it is not over-their-head. It is basic knowledge for someone who is not familiar with GAAP.
5
Anonymous Author
Covered GAAP very clearly and included a brief origin of GAAP. I would recommend to any Accountant or SOX Finance Auditor.
5
Anonymous Author
A very good refresher course for everyone in accounting profession. It covers basic GAAP principles, rules and standards.
5
Anonymous Author
A good refresher course on the basics of GAAP with helpful materials to refer back to and good explanations throughout.
5
Member's Profile
i took this so i could better teach my clients and i will use some of the slides to get them to maybe check you out....
5
Member's Profile
A quite informative and concise review course of the main GAAP principles. Everything is to the point and very useful.
5
Anonymous Author
A great course for an overview of GAAP. I like how the instructor provides historical background of the FASB and AIA.
5
Member's Profile
Some of the questions on the exam were not clearly covered in the materials, but all in all, this is a good course.
5
Anonymous Author
This was a little more difficult as it does not pertain to my current job, however it is valuable information.
5
Anonymous Author
The presentation was a good refresher on how the rules are organized, and a nice description of the hierarchy.
5
Anonymous Author
Comprehensive overview of GAAP principles, assumptions and considerations. Instructor is very knowledgeable.
4
Anonymous Author
Good overview. Best suited for beginners. Would benefit from more practical examples to support the theory.
4
Member's Profile
a good refresher of GAAP principles, assumptions, and considerations. A good class to do on a regular basis
5
Member's Profile
Good basic review of GAAP for experienced accountants, and a good primer for those new to the field.
5
Member's Profile
Good teacher, informative course. Test questions properly reviewed on the material. Objectives met.
3
Anonymous Author
A good reminder to the basic concepts and rules underlying our accounting guidance and principles
4
Anonymous Author
Instructor explains well, the slides are helpful. This is a very basic accounting theory class.
5
Anonymous Author
Excellent review of GAAP. Hit concepts I have not reviewed since being in school. Thank you.
5
Member's Profile
Good course on GAAP principles, it's a foundational course but still has quality information.
4
Member's Profile
This is a good review of the principles. The instructor is knowledgeable and detailed.
5
Anonymous Author
Great review of GAAP Principles, Assumptions and Considerations. Content is well organized.
5
Anonymous Author
Content covers the main topics of the course related to the GAAP principles and assumptions
5
Member's Profile
This course was well structured and the instructor was easy to follow. Highly recommend.
3
Anonymous Author
This course covers the very basics of accounting. This does not dig into in-depth topcis
5
Anonymous Author
Great course for introductory concepts on GAAP. Could be a used as a good refresher.
5
Anonymous Author
Solid overview of GAAP, more for beginners. PDF of slide show is a useful reference.
4
Member's Profile
This was ok. Examples are ok. Updates like revenue recognition topic 606 is good.
4
Member's Profile
An excellent and comprehensive review of the history and details regarding GAAP.
5
Member's Profile
Decent review for those not actively involved in preparing financial statements.
5
Anonymous Author
Helpful course as an intro or refresher on the foundations of why we have GAAP
5
Anonymous Author
Lynn is an excellent teacher and this was a great high-level summary of GAAP.
4
Member's Profile
Important standards and assumptions are explained in a way which is helpful.
5
Member's Profile
This course Refreshed my knowledge of accounting assumptions and principles
5
Anonymous Author
Presents a great overview of GAAP in a clear and straight forward approach.
5
Anonymous Author
Great lecture from the lecturer, very clear explanation for the concept.
5
Anonymous Author
Good course to recap on GAAP principles assumptions and considerations.
5
Anonymous Author
Great overview of GAAP principals, assumptions and considerations.
5
Anonymous Author
Well organized and presented. Practical examples. Easy to follow.
5
Anonymous Author
Thanks Lynn, I am quite satisfied with the info. You are the best.
4
Anonymous Author
Very comprehensive summary, as usual, related to this instructor.
5
Anonymous Author
Provides a throughout overview of GAAP and associated principles.
5
Anonymous Author
Great foundational course. Well organized with reference slides.
5
Member's Profile
Great course i objectively learned a lot from the instruction.
4
Anonymous Author
Interesting and informative. Strongly recommend this course
5
Anonymous Author
A quick recap of GAAP. The history of it was interesting.
5
Member's Profile
Good overview of the GAAP principles and considerations for
5
Anonymous Author
Great course, this lady is my favorite teach on this site.
4
Anonymous Author
Enjoyable overview of Conceptual Framework related concepts
5
Anonymous Author
Good coverage of the basic principles and history of GAAP.
5
Member's Profile
Learning Objectives were discussed, requirements were met.
5
Anonymous Author
Good information. Your course materials are very helpful!
5
Anonymous Author
This was a helpful review and the slides were very useful.
5
Member's Profile
For the most part, easy to understand and comprehensible
4
Anonymous Author
I thought the course was informative, and I enjoyed it.
5
Member's Profile
Good overview of GAAP and presented in an effective way.
5
Anonymous Author
nice and concise. appreciate the refresher on the basics
4
Member's Profile
Great overview of GAAP and its history. Very helpful
4
Member's Profile
This was a little more confusing and hard to follow.
5
Member's Profile
interesting course, very informative. great takeaways
5
Anonymous Author
Very good information and organization of the course.

Prerequisites

Course Complexity:

No advanced preparation or prerequisites are required for this course.

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .

3 QuestionsCourse Questions and Answers

User picture

The last question on the Final Exam is about information that was not covered in the course. The question reads: "Which of the following are NOT considered elements of other comprehensive income?" I knew the answer from Intermediate Accounting I, but this could be frustrating for others.

Also, the question on the Final Exam: "How is the concept of going concern related to the income statement? gives as a correct answer information that is not stated in the material. I will admit when you think about it, I understand why it is the correct answer.

Perhaps these were questions that caused the reviewer [Anonymous (Accountant)] to feel that "the exam questions were very deceiving."

Member's Profile

Thanks for your comments. I always take the questions from the material or terms. I will relook at these to see if there is an issue. Thanks for you input

Member's Profile

I found the problem and thank you again for pointing it out. Illumeo inadvertently used the final exam questions from the GAAP Financial statement course on this course. I will have them correct it. This should have been caught in their quality review.

Course Syllabus
INTRODUCTION AND OVERVIEW
  4:52Introduction to GAAP Principles, Assumptions and Considerations
  15:24GAAP History
  7:46Rules and Standards
  6:10GAAP Assumptions
  15:42GAAP Principles
  3:52Considerations
  5:56Balance Sheet Principle Analysis
  3:50Income Statement Principle Analysis
  3:07Cash Flow Pinciple Analysis
  3:05Stockholders Equity Principle Analysis & Summary
CONTINUOUS PLAY
  1:09:44GAAP Principles, Assumptions and Considerations
Supporting Materials
  PDFSlides: GAAP Principles, Assumptions and Considerations
  PDFGAAP Principles, Assumptions and Considerations Glossary/Index
review and test
  quizREVIEW QUESTIONS
 examFINAL EXAM