Principles-Based GAAP Is Sometimes Criticized for Being

question 73

Multiple Choice

Principles-based GAAP is sometimes criticized for being

• A) too inflexible.
• B) too flexible.
• C) too inconsistent.
• D) too difficult for the reader to understand.

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Definitions:

Deposit In Transit

A banking term that refers to checks or other forms of payment that have been received and recorded by a company, but not yet processed or credited by the bank.

Bank Statement Adjustment

Corrections made to a bank account balance to reflect transactions, fees, or errors not previously recorded in the company's books.

Company Books Adjustment

Modifications made to the accounting records to correct errors or update the accounts as required.

NSF Check

A check that cannot be processed due to insufficient funds in the account on which it was drawn, often resulting in a fee.