Which of the Following Is Not True About Generally Accepted

question 53

Multiple Choice

Which of the following is not true about generally accepted accounting principles (GAAP) ?

• A) GAAP provide specific guidelines as to how to account for specific events impacting the financial performance of the firm.
• B) The scrupulous application GAAP accounting rules does ensure consistency in comparing one firm's financial performance to another.
• C) It is customary for definitive agreements of purchase and sale to require that a target company represent that its financial books are kept in accordance with GAAP.
• D) GAAP guarantees that a firm's financial books are accurate.
• E) Differences between how a firm records actual financial transactions and how they should be recorded based on GAAP may indicate fraud or mismanagement.

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Definitions:

Duration

The length of time that something lasts or continues.

Youthful Appearance

The look or characteristics of being young, often involving traits like smooth skin, full hair, and vibrant energy.

Maturational Crisis

A crisis that occurs as a result of reaching a new developmental stage in life, often requiring an individual to acquire new coping mechanisms to adapt effectively.

Reactive Crisis

A crisis that emerges in response to an unanticipated event, causing stress or disruption in one's life or organization.