The Accounting Principles Rule States That Financial Statements

question 22

Multiple Choice

The Accounting Principles Rule states that financial statements:

• A) Always must comply with GAAP
• B) Never should contain a departure from GAAP
• C) May contain a departure from GAAP for administrative reasons, as long as the departure is clearly disclosed
• D) May contain a departure from GAAP if adherence to GAAP would result in the statements being misleading

---

Definitions:

Part Requirement

Specification or quantity of a component necessary for completing a manufacturing process or assembling a final product.

Parent Component

In manufacturing or software development, a main component that includes or is linked to subordinate components within a product or system.

Safety Stock

Inventory kept on hand as a buffer against variability in demand or supply, ensuring that out-of-stock situations are minimized.

MRP Logic

Refers to the set of principles and algorithms used in Material Requirements Planning systems to schedule and plan production and inventory in manufacturing.