If Generally Accepted Accounting Principles Did Not Exist

question 24

Multiple Choice

If generally accepted accounting principles did not exist,

• A)comparability between companies' financial statements would be enhanced.
• B)financial statements of different companies would be presented more uniformly.
• C)each company would have to develop its own set of accounting practices.
• D)social welfare would have greater potential of being maximized.

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Definitions:

Universal Defense

A defense that is valid against all holders of a negotiable instrument, including holders in due course (HDCs) and holders with the rights of HDCs. Universal defenses are also called real defenses.

Personal Defense

Legal defenses that a defendant may use in a court of law to challenge the validity of a claim based on personal circumstances or conditions.

Agency Status

The condition of being an agent who is legally authorized to act on behalf of another person or entity, often subjected to specific responsibilities and liabilities.

Negotiable Instruments

Legal documents guaranteeing the payment of a specific amount of money, either on demand or at a set time, and which can be transferred by endorsement or delivery.