Generally Accepted Accounting Principles Are

question 81

Multiple Choice

Generally accepted accounting principles are:

• A) optional procedures for recording economic events.
• B) mandatory rules applied to both financial and management accounting.
• C) the rules of accounting, prescribed exclusively by Federal regulatory agencies.
• D) standards of accounting, a material departure from which may result in a qualified opinion issued by an auditor.

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Definitions:

Corporate Assets

Resources owned by a corporation, including physical properties, intellectual property, and financial assets, which are used to operate the business.

Preemptive Right

The right of existing shareholders to purchase additional shares in a company before they are offered to the public, often to maintain their percentage of ownership.

Statutory Close Corporation

A type of corporation characterized by a limited number of shareholders, less formal operating and corporate governance structures, and restrictions on the transfer of shares, as defined by statute.

MBCA

Stands for the Model Business Corporation Act, which provides a template for state laws regulating corporations.