With Respect to the Role of the Government in Establishing

question 77

Multiple Choice

With respect to the role of the government in establishing accounting standards in the United States,which of the following statements is incorrect?

• A)Most accounting reporting requirements are determined by the FASB,which is a non-government institution.
• B)The SEC,and not the FASB,has the ultimate legal authority over most financial reporting to investors.
• C)The FASB can act independently of the SEC and does not need the SEC's support in establishing accounting standards.
• D)The SEC,which is an agency of the federal government,is empowered to ensure full and fair disclosures by corporations.
• E)The SEC is allowed to take an active role in establishing accounting standards.

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Definitions:

Interest Payments

The regular payments made by a borrower to a lender as compensation for the use of borrowed money, usually calculated as a percentage of the outstanding principal.

CCA Class

In the context of Canadian taxation, refers to the categorization of depreciable property for the purpose of calculating capital cost allowance (tax deductions for depreciation).

Manufacturing Costs

Expenses directly related to the production of goods, including raw materials, labor, and factory overhead.

Tax Rate

The rate at which income is taxed for a person or business entity.