1. ____ Most countries require companies to follow U.S. GAAP in preparing their
ID: 2356050 • Letter: 1
Question
1. ____ Most countries require companies to follow U.S. GAAP in preparing their financial statements.2. ____ Companies face many uncertainties when preparing their financial statements.
3. ____ A liability is defined as a future economic benefit that an organization owns or controls.
4. ____ Creation of U.S. GAAP is primarily done by the U.S. government.
5. ____ In order for investors to evaluate the financial information of a company, it is vital that the financial information be exact.
6. ____ Materiality depends on the size of the organization.
7. ____ Material misstatements made on financial statements are acceptable as long as there are only a few of them.
8. ____ An example of an uncertainty faced by companies in financial statements is a pending lawsuit.
9. ____ Only accountants need to understand the terminology of accounting.
10. ____ An employee is an example of an asset.
11. ____ A sale is usually considered revenue even if cash is not collected.
12. ____ The purchase of a building is recorded as an expense.
13. ____ A deliberate misstatement is known as fraud.
Explanation / Answer
1.) F 2.) T 3.) F 4.) F 5.) T 6.) T 7.) F 8.) T 9.) F 10.) F 11.) T 12.) F 13.) T
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