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GAAP Presentation of Financial Statements

Author: Lynn Fountain

CPE Credit:  2 hours for CPAs

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.

Per generally accepted accounting principles (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 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


Publication Date: May 2023

Designed For
Accounting, Finance and operational personal interested in having a stronger understanding of the financial statement process. This includes sole proprietors and owners of businesses

Topics Covered

  • The purpose and composition of GAAP principles
  • GAAP principles and the presentation of:
    • Balance sheet
    • Income statement
    • Statement of comprehensive Income
    • Cash flow statement
  • Aspects of ASC 205 as it relates to financial statements


Learning Objectives

  • Recognize generally accepted accounting principles (GAAP) and the presentation of balance sheet assets, liabilities and equity
  • Recognize GAAP principles and the presentation of income through revenue, expenses and net income/loss
  • Recognize GAAP principles and the presentation of the statement of comprehensive income
  • Identify GAAP principles and the presentation of the cash flow statement including sections of operating activities, investing activities and financing activities
  • Identify the aspects of ASC Topic 205 for presentation of the financial statements in accordance with GAAP
  • Identify the organization that influences GAAP and has the power to regulate financial markets and accounting standards
  • Identify the type of account that is increased by a debit
  • Identify the type of activity that is listed first on the statement of cash flows
  • Identify the section of the statement of cash flows that buying and selling PP&E should be included in



Instructional Method

NASBA Field of Study
Auditing (2 hours)

Program Prerequisites

Advance Preparation

Additional Course Details

  • Filed of Study: Auditing
  • Publisher: Wolters Kluwer
  • Course Level: Basic
  • Pre-Requisites: None
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