Which of the Following Statements Is False

question 68

Multiple Choice

Which of the following statements is false?

• A) GAAP uses the cash basis of accounting.
• B) GAAP requires that revenue and costs must be capable of being measured reliably.
• C) GAAP employs accrual accounting.
• D) GAAP employs the time period assumption.

---

Definitions:

Discount on Bonds Payable

The difference between the face value of a bond and its selling price when a bond is sold for less than its face value.

Interest Expense

The expenses an entity faces for borrowing money, encompassing loans, bonds, or credit lines.

Effective-Interest Method

An accounting practice used to allocate loan or bond interest expense over the life of the loan/bond based on the loan's/bond's yielding interest rate.

Bond Premium Amortization

The gradual reduction over time of the amount by which a bond's purchase price exceeds its face value.