BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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They help managers make business decisions.
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They are often managers or supervisors.
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They are required to follow rigid standards.
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They compile reports only as they are needed.
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Detailed explanation-1: -Generally accepted accounting principles (GAAP) are used to prepare and report financial statements. The 10 principles of GAAP pertain to accounting consistency, transparency and ethics. Although GAAP is only mandatory for publicly traded and regulated companies, it is strongly encouraged for all companies.
Detailed explanation-2: -The ultimate goal of any set of accounting principles is to ensure that a company’s financial statements are complete, consistent, and comparable. This makes it easier for investors to analyze and extract useful information from the company’s financial statements, including trend data over a period of time.
Detailed explanation-3: -Accounting standards are authoritative standards for financial reporting and are the primary source of generally accepted accounting principles (GAAP). Accounting standards specify how transactions and other events are to be recognized, measured, presented and disclosed in financial statements.
Detailed explanation-4: -Prudence is the exercise of caution when making judgements under conditions of uncertainty. The exercise of prudence means that assets and income are not overstated and liabilities and income are not understated.