Because GAAP Specifies What Must Be Contained in Financial Reports,management

question 114

True/False

Because GAAP specifies what must be contained in financial reports,management is precluded from disclosing financial and nonfinancial operating details that GAAP does not require-thus promoting comparability among companies' financial reports.

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Definitions:

Operating Segment

A component of an enterprise, engaged in business activities from which it may earn revenues and incur expenses.

Consistency

An accounting principle that requires accounting methods and principles to be applied in the same manner from period to period unless a change is justified.

Income Tax Expense

The amount of money a company or individual owes to the government based on the taxable income earned during a fiscal year.

Interim Period

A temporary or Middle phase in a fiscal year or financial reporting period, often used for assessing a company's performance partway through the year.