According to GAAP, There Are Two Categories of Accounting Principles

question 8

Multiple Choice

According to GAAP, there are two categories of accounting principles: recognition and _________________.

• A) disclosure
• B) preparation
• C) auditing
• D) budgeting

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Definitions:

ROE

Return on Equity (ROE) is a financial ratio that measures the profitability of a company in relation to shareholders' equity, indicating how well the company uses investments to generate earnings growth.

Total Assets Turnover

A financial metric that measures the efficiency of a company's use of its assets in generating sales revenue.

Equity Multiplier

A measure of a company's financial leverage, calculated as total assets divided by total equity.

Net Income

Net Income is the total earnings of a company after deducting all expenses, taxes, and costs, representing the profit earned during a specific period.