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Regulatory and Conceptual Frameworks in Accounting

The regulatory framework in accounting provides regulations and best practices for accounting at the international level. International accounting standards' broad regulatory framework is usually provided by the accounting standards board. The set of rules formulated by this board applies to all companies in Europe. The regulatory framework of accounting consists of standards of accounting, the conceptual framework, and company law. These three are the foundation of the generally accepted accounting principles (GAAP).

Mean Deviation (Mean Absolute Deviation)

This is the average of the absolute deviations of a dataset of a mean. While you might not frequently encounter this concept in mathematical statistics, a mean deviation is one of the vital descriptive statistics tools. It has the absolute value which makes using statistics to perform analytical computations too complicated compared to standard deviation.

Normal Probability Distribution

Normal probability or the Gaussian distribution is a likelihood distribution that shows that data points that are closer to the mean appear frequently than those that are far from the mean. A graphical representation of a normal representation is similar to a bell curve. This type of distribution is based on the central limit theorem.

Accrual method versus cash method

These are the two methods applied in financial accounting. Accountants can use either one of these methods or a combination of the two. In the accrual method, accountants record transactions when they occur, and the revenue is recognizable. On the other hand, the cash method involves recording transactions when cash exchanges hands. The accounting professionals using the cash method only record revenues when the receipt of payment has been received. Additionally, expenses are recorded upon the payment of the obligation