It is TRUE that GAAP is the term used to indicate the whole body of FASB literature. It is FALSE Any company claiming compliance with GAAP must comply with most standards and interpretations but does not have to follow the disclosure requirements. It is TRUE that the primary governmental body that has influence over the FASB is the SEC. It is FALSE the FASB has a government mandate and therefore does not have to follow due process in issuing a standard. CA1-2
It is True the objective of financial statements emphasizes a stewardship approach for reporting financial information It is False 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 owners’ or stockholders’ equity. It is False because they are generally shorter, FASB interpretations are subject to less due process, compared to FASB standards. It is True the objective of financial reporting uses an entity rather than a proprietary approach in determining what information to report. CA1-3
GAAP stands for generally accepted accounting principles. (D) Accounting standard-setters use the following process in establishing accounting standards are Research, discussion paper, exposure draft, and Standard (D) GAAP is comprised of any accounting guidance included in the FASB Codification. (D) The authoritative status of the conceptual framework is as follows, it is used when there is no standard or interpretation related to the reporting issues under consideration. (A) The objective of financial reporting places most emphasis on reporting to capital providers. (A) General-purpose financial statements are prepared primarily for external users. (B) Economic consequences of accounting standard-setting means accounting standards can have detrimental impacts of the wealth levels of the providers of financial information.(D) The expectations gap is what the public thinks accountants should do and what accountants...
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