GAAP is the term used to indicate the whole body of FASB authoritative literature. True
Any company claiming compliance with GAAP must comply with most standards and interpretations but does have to follow the disclosure requirements. False
This statement is false because the companies they not only have to comply with most GAAP standards and interpretations but also have to follow the disclosure requirements.
The primary governmental body that has influence over the FASB is the SEC. True
The FASB has a government mandate and therefore does not have to follow due process in issuing a standard. False
FASB has a government mandate and therefore has to follow a due process system that entails steps like placing an item on the agenda, performing research and issuing a discussion memorandum, having a public hearing on the DM, performing more research and issuing an exposure draft, providing additional time to receive input from the public, and passing a final standard.
The objective of financial statements emphasizes a stewardship approach for reporting financial information. True
The purpose of the objective of financial reporting is to prepare a balance sheet, an income statement, a statement of cash flows, and a statement of owner’s or stockholders’ equity. False
The purpose of the objective of financial reporting is to provide general purpose financial information about the reporting entity to present/ potential equity investors, lenders and creditors about the assets, liabilities, and cash flows of the corporations.
Because they are generally shorter, FASB interpretations are subject to less due process, compared to FASB standards. False
FASB interpretations even though are generally shorter have the same due process, as FASB standards.
The objective of financial reporting uses an entity rather than a proprietary approach in determining what information to report. True
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