Generally Accepted Accounting Principles Are

question 122

Multiple Choice

Generally accepted accounting principles are

• A)income tax regulations of the Internal Revenue Service.
• B)standards that indicate how to report economic events.
• C)theories that are based on the physical laws of the universe.
• D)principles that have been proven correct by academic researchers.

---

Definitions:

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, reflecting the true profitability of a firm's operations.

Demand Increase

A situation where there is a rise in consumer desire to purchase goods or services, leading to higher quantities demanded at the same price levels.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, indicating the profitability of a firm beyond normal returns.