The Common Set of Standards and Procedures by Which Audited

question 12

Multiple Choice

The common set of standards and procedures by which audited financial statements are prepared is known as:

• A) The matching principle.
• B) The cash flow identity.
• C) Generally Accepted Accounting Principles (GAAP).
• D) The Freedom of Information Act (FOIA).
• E) The 1993 Omnibus Budget Reconciliation Act.

---

Definitions:

Increase

An upward movement or growth in value, amount, or any measurable attribute.

Owner's Equity

The residual interest in the assets of a business after deducting liabilities, representing the owner's claim on the company's resources.

Revenues

The total income generated by a company from its business activities, typically from the sale of goods or services before any expenses are subtracted.

Expenses

Outflows of resources or incurrences of liabilities that a company undergoes as part of its operations to generate revenue.