Which of the Following Statements Is Incorrect

question 53

Multiple Choice

Which of the following statements is incorrect?

• A)Under GAAP, statements are prepared using accrual accounting.
• B)Under GAAP, all assets are marked to market each accounting period.
• C)Under GAAP, it is necessary to make certain estimates.
• D)Annual statements submitted to the SEC (10-K) must be prepared using GAAP.

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Definitions:

Net Float

The difference between checks written against a bank account and those that have been deposited but not yet cleared, affecting the balance.

Chequing Account

A bank account allowing the account holder to withdraw funds, write checks, and use electronic debit to access funds.

Cheque

A cheque is a written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer or a named party.

Regional Lockbox System

A banking service that speeds up collection of payments by establishing a network of collection points.