Most investors and all banks expect to be provided financial statements that meet the rules of _______.
A) generally accepted accounting principles or GAAP
B) managerial accounting principles
C) the business entity concept
D) financial flexibility

Question

Quizplus · Accepted Answer

Most investors and banks expect financial statements to meet the rules of generally accepted accounting principles (GAAP), which are the standard accounting guidelines followed by businesses in the United States. GAAP provide a common language and standardization for financial statements, making it easier for investors and lenders to compare companies and make informed decisions. Managerial accounting principles are focused on internal decision-making and are not usually relevant to external investors and lenders. The business entity concept is a foundational accounting principle that assumes a business is separate from its owners, but it does not dictate specific financial statement requirements. Financial flexibility is not a set of accounting principles but rather a financial goal.

Most Investors and All Banks Expect to Be Provided Financial