The Primary Objective of GAAP Is to Provide Accounting Information

question 8

Multiple Choice

The primary objective of GAAP is to provide accounting information that is

• A) usefulness for decision making
• B) free from bias
• C) timeliness
• D) comparability
• E) neutral

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Definitions:

Direct Materials

Raw materials that are traceable directly to the finished product and are an integral part of the finished product.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, providing a more useful tool for controlling costs.

Activity Variance

The difference between the expected activity (in terms of cost, time, or resources) and the actual activity performed.

Total Expenses

The sum of all costs and expenses incurred by a business during a specific period, including operating and non-operating expenses.