1.2 Learning Objective 1-2
1) Generally accepted accounting principles, or GAAP, are the rules and procedures established by the Securities and Exchange Commission.
2) The SEC establishes international financial reporting standards.
3) The fundamental qualitative characteristics of accounting information are relevance and reliability.
4) Another name for the continuity assumption is the going-concern assumption.
5) Following U.S. GAAP, the carrying value of a building can be increased to its fair value.
6) Accounting is moving in the direction of reporting more and more assets and liabilities at their fair values.
7) Since we live in a global economy, all countries have adopted the same accounting standards for business transactions.
8) Characteristics of faithfully representative information do NOT include:
A) complete.
B) neutral.
C) accurate.
D) relevant.
9) Enhancing qualitative characteristics of accounting information do NOT include:
A) comparability.
B) verifiability.
C) timeliness.
D) materiality.
10) The process of verifying accounting information in financial statements is undertaken by:
A) the Securities and Exchange Commission.
B) internal auditors only.
C) external auditors only.
D) internal and external auditors.