Which of the following statements is true of the GAAP?
A)It is used by auditors as a guide for their nonaudit services only.
B)It is the accepted form of accounting principles around the world.
C)It cannot be modified once established by the American Institute of Certified Public Accountants.
D)It sets rules for how corporations must set their accounts on their financial statements.

Question

Quizplus · Accepted Answer

GAAP (Generally Accepted Accounting Principles) sets rules for how corporations must set their accounts on their financial statements. Option A is incorrect as GAAP is used by auditors as a guide for their audit as well as non-audit services. Option B is incorrect as GAAP is primarily used in the United States, while other countries have their own accounting principles. Option C is incorrect as GAAP undergoes modifications and updates periodically.

Which of the Following Statements Is True of the GAAP