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: August 21, 2023

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 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. Financial Statement Audit in Accordance with GAAS - General Standards
  13. Financial Statement Audit in Accordance with GAAS - Conducting the Audit
  14. Financial Statement Audit in Accordance with GAAS - Auditors' Report and Opinion
  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
158 Reviews (782 ratings)

Reviews

5
Anonymous Author
I liked the real world examples she gave to bring concepts to life.

4
Anonymous Author
This was a good refresher course on GAAP principles.

5
Anonymous Author
Great refresher for those who haven't studied the GAAP concepts in a long time. This course would be great for business managers who do not have an accounting background. I enjoyed learning about the history of how GAAP came about. I always enjoy Lynn's courses but I thought the last 3 sections on the application of GAAP principles to financial statements were a bit rushed. I will definitely take part 2 of this course.

5
Anonymous Author
Like pretty much everything about this course. in contract, It should have provided more example of each category such as Assumptions, Considerations, Principles. Also, it should have provided a complete exercise concerning every single concept because there are very confusing in the life experience. thank you so much for the course.

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.

5
Anonymous Author
I was surprised to learn that the depression was caused by bad accounting practices, but it totally makes sense! It shows how important the GAAP and FASB really are and how they regulate the accounting world. This course would be good for anyone going into business.

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
Anonymous Author
This is a great course to review the primary GAAP rules. I am looking forward to taking Lynn's second GAAP course as well to get further information on financial statements. Lynn's teaching style is easy to follow along with and understand.

5
Member's Profile
The instructor was knowledgeable about the subject matter. Content of the course was understandable and provided a basic understanding of the materials. The course would be good for someone with a basic understanding of accounting.

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
This course provided a nice review of the history of GAAP and the importance of GAAP principles. It discussed assumptions, considerations, rules and standards as they relate to financial statements.

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.

3
Anonymous Author
This course provides interesting history on accounting principles and concepts. While this is interesting, it is not overly helpful in day-to-day application of accounting.

5
Anonymous Author
The course is a great overview of assumption, principals and constraints. The professor does a great job of explaining the concepts and gives ample examples of each area.

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
I like Lynn's classes because they are easy to stay focus and she provides plenty of examples to drive her points across. Very good summary of GAAP concepts.

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
Anonymous Author
I thought this course was very interesting and helpful. I thought the instructor explained the topic very well. I would recommend this course to others.

4
Member's Profile
The Material was harder to follow, but a great course. i would have liked things to be explained better but i understand there is overlapping viewpoints.

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.

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.

4
Anonymous Author
Very good highlight of how and why GAAP was introduced. Linking the principles to each of the major financial statements was very helpful.

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.

4
Anonymous Author
Decent recap and introduction to GAAP. Newcomers will find it encompassing and it is a good refresher for a more seasoned student.

5
Member's Profile
Solid explanation of GAAP principles, assumptions and considerations. Slides and glossary terms were very helpful in CPE session.

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
Member's Profile
Great course with helpful supporting material. I also enjoyed the different videos which helped prepare me for the final exam.

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
quiz and exam were tricky due to wording of the questions there was at least one question that had two correct answers

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
Anonymous Author
Very well taught class. Everything was easy to follow and understand. Would definitely recommend to others interested.

5
Anonymous Author
This course is a must for all Accounting professionals. It is indeed clear and concise. Thank you to the facilitator

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.

4
Anonymous Author
Well organized course with good information

5
Anonymous Author
This was a little more difficult as it does not pertain to my current job, however it is valuable information.

3
Anonymous Author
Kind of a random course - not too clear on overall objectives here. I'd recommend others for a quick 1-2 CPE.

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.

5
Anonymous Author
The topic was well - presented and I like the discussion of GAAP's history and when it was first used. Thanks!

4
Anonymous Author
Good overview. Best suited for beginners. Would benefit from more practical examples to support the theory.

5
Member's Profile
It would be difficult to summarize GAAP - but this course is an excellent summarization and review of GAAP!

4
Member's Profile
a good refresher of GAAP principles, assumptions, and considerations. A good class to do on a regular basis

5
Anonymous Author
Great course covering many important concepts and history behind evolution of current accounting standards

4
Anonymous Author
Enjoyed the class as it gave a overview and provided a refresher on GAAP. Instructor did a phenomenal job.

5
Member's Profile
Good refresher of the basic concepts used in the preparation of financial statements in the United States

4
Anonymous Author
A good primer and review for GAAP. Thanks for the material for this course as it is a helpful summary.

4
Member's Profile
I enjoyed the course's organization of guiding principles and considerations. Good general approach.

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
course was fine and straightforward refresher on gaap history and the balance sheet income statement

5
Member's Profile
Content was well-organized. Time limit was sufficient, and structure was concise and well-designed.

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

5
Anonymous Author
Learned a lot about on how and what should we report. All the details in the reporting system.

4
Anonymous Author
Instructor explains well, the slides are helpful. This is a very basic accounting theory class.

5
Anonymous Author
This was another really good course just as a refresher on the basis of accounting. Thank you!

5
Anonymous Author
The instructor is very informative. The structure is clear with easily understanding examples.

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.

5
Anonymous Author
GAAP principles course was a good refresher and provided some knowledge that I had forgotten.

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
Great review of basic and above accounting concepts. The instructor is always interesting.

5
Anonymous Author
Content covers the main topics of the course related to the GAAP principles and assumptions

5
Anonymous Author
This was a very easy course. Everything was explained clearly and the examples were great.

4
Anonymous Author
Overall great course regarding basic accounting principals. This is a great review course.

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! A good summary of GAAP history and GAAP Principles and Assumption, etc.

5
Anonymous Author
Really a great refrsher for GAAP compliance. Providing great knwoledge on the subject.

5
Member's Profile
This course was a good refresher on GAAP principles , Assumptions and Considerations.

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.

5
Anonymous Author
nice presentation material with relevant examples to understand the concepts easily.

4
Anonymous Author
This was a great review of GAAP. The format made it easy to digest and understand.

4
Member's Profile
This was ok. Examples are ok. Updates like revenue recognition topic 606 is good.

5
Member's Profile
Lynn’s course onGAAP principles, assumptions and considerations was well prepared

4
Member's Profile
God refresh on GAAP Principles, Assumptions and Considerations, highly recommended.

5
Anonymous Author
This course is a good refresher of the basic accounting principles and assumptions

5
Member's Profile
Good and interesting course. Instructor was easy to listen to and I enjoyed this.

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.

3
Member's Profile
This was a very basic course. A good refresher on some basic accounting topics.

4
Anonymous Author
This was the most difficult section yet. Great information for an accountant.

5
Anonymous Author
Helpful course as an intro or refresher on the foundations of why we have GAAP

5
Anonymous Author
Great course for beginners on GAAP principles, assumptions and considerations

5
Anonymous Author
Lynn is an excellent teacher and this was a great high-level summary of GAAP.

5
Anonymous Author
The information for this course was presented clearly for the subject matter.

5
Anonymous Author
Great refresher on basic accounting concepts and the history of accounting.

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
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4
Member's Profile
This is a helpful course that takes you back to the basics of accounting.

5
Anonymous Author
Great intro course for GAAP principles. Always good to brush up on these.

4
Anonymous Author
Presenter was very good and materials were presented in a thorough manner

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
I would recommend this course to any CPA working on their CPE credits.

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 refresher on some GAAP basic knowledge. Easy to understand.

5
Anonymous Author
terrific course explaining the history behind todays accounting

5
Member's Profile
Great course i objectively learned a lot from the instruction.

5
Anonymous Author
Good easy refresher on basic GAAP principles. Easy to follow.

5
Anonymous Author
Good overview of the basic principles. Examples were helpful.

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; can't get enough of the controllership series!

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
Good instructor and review of GAAP principles and history.

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
Anonymous Author
The course did a great job at explaining the principles

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
Nicely presented background and rule creation of GAAP.

5
Member's Profile
interesting course, very informative. great takeaways

5
Anonymous Author
Very good information and organization of the course.

4
Anonymous Author
Informative course covering the basics of U.S. GAAP.

5
Anonymous Author
This has been a useful course. It was a good review

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 .
Course Questions and Answers(4 Questions)
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.

Member's Profile

Enjoyed class. I especially liked the easy-to-follow examples.

Instructor for this course
Course Syllabus
INTRODUCTION AND OVERVIEW
  Introduction to GAAP Principles, Assumptions and Considerations4:52
  GAAP History15:24
  Rules and Standards7:46
  GAAP Assumptions6:10
  GAAP Principles15:42
  Considerations3:52
  Balance Sheet Principle Analysis5:56
  Income Statement Principle Analysis3:50
  Cash Flow Pinciple Analysis3:07
  Stockholders Equity Principle Analysis & Summary3:05
CONTINUOUS PLAY
  GAAP Principles, Assumptions and Considerations 1:09:44
Supporting Materials
  Slides: GAAP Principles, Assumptions and ConsiderationsPDF
  GAAP Principles, Assumptions and Considerations Glossary/IndexPDF
review and test
  REVIEW QUESTIONSquiz
 FINAL EXAMexam