The Generally Accepted Accounting Principles (GAAP) Are

question 22

Multiple Choice

The generally accepted accounting principles (GAAP) are

• A) rules that outline how a firm can operate ethically.
• B) rules on how the firm will be valued in the event of a merger.
• C) rules and procedures that define how companies are to maintain financial records and prepare financial reports.
• D) rules for how a company can issue stock to raise money.

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Definitions:

Surplus

A situation where the quantity supplied exceeds the quantity demanded, or when revenues exceed expenses.

Easily Stored

Refers to items or data that can be kept or archived with minimal effort or resources.

Current Supply

The total amount of a particular good or service available to consumers at the current time.

Price Floor

A government- or group-imposed price control that sets the lowest legal price a commodity can be sold at to prevent market prices from falling below a certain level.