Which of the Following Is Not True of Accounting Principles

question 43

Multiple Choice

Which of the following is not true of accounting principles?

• A) Financial accountants follow generally accepted accounting principles (GAAP).
• B) Following GAAP allows accounting information users to compare one company to another.
• C) A new accounting principle can be adopted with stockholders' approval.
• D) The Financial Accounting Standards Board (FASB) has primary responsibility for developing accounting principles.

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Definitions:

Present Value

The present value of a future amount of money or series of cash flows, taking into account a particular rate of return.

Rate of Interest

The percentage of a sum of borrowed money that is paid by the borrower to the lender for the use of that money for a certain period.

Frank Knight

was an influential American economist known for his work on risk, uncertainty, and the role of the entrepreneur in economic theory.

Probability

The measure of the likelihood that an event will occur.