Question

Identify the framework for the entire accounting process and describe its components and how they fit together to form this framework.

Answer 1

The entire accounting framework is derived from the accounting equation. Accounting equation is derived from the formula in which Assets equals the summation of Liabilities and capital. Assets consist of tangible and intangible assets. Liabilities can be short term or long term in nature. Also it can be secured or unsecured. Capital refers to the investments made the owner of the company.

Answer 2

Accounting is the process of constructing and maintaining financials.
The framework for the entire accounting process is referred to as definitional framework. The framework provides a categorized structure that classifies the basic elements in accounting. The accounting equality shows that the assets of a business are equal to its equities. This means that Assets = Equities. Assets were defined earlier as the things of value owned by the business, or the economic resources of the business.