The Primary Responsibility of Security and Exchange Commissions with Respect

question 72

Multiple Choice

The primary responsibility of security and exchange commissions with respect to financial statements is to

• A) set generally accepted accounting principles (GAAP), which must be followed in their preparation.
• B) review accounting choices made by companies in their financial statements to ensure decision-making logic is sound.
• C) monitor financial statements to ensure full and plain disclosure of material information, thus maintaining compliance with listing requirements.
• D) monitor and analyze the information looking for signs of an improved or weakened financial condition.

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Definitions:

Double-Declining-Balance

An accelerated method of depreciation calculating depreciation at twice the rate of the straight-line depreciation method.

Salvage Value

The assessed worth of an asset at the expiration of its life of usefulness.

Depreciation Expense

The organized spreading of a tangible asset's expense over the duration of its utility.

Useful Life

The estimated duration a fixed asset is expected to be economically usable, with normal repairs and maintenance.