Which of the following is NOT true about generally accepted accounting principles (GAAP)?
A) They are outlined in Statements of Financial Accounting Standards.
B) In the United States, they are issued by the Financial Standards Accounting Board.
C) They are stringent, giving firms little latitude in reporting financial situations.
D) Two firms that both follow GAAP can still have significant differences in how they compute their financial outcomes.

Question

Quizplus · Accepted Answer

GAAP provides guidance for financial reporting, but it also allows for some flexibility in interpretation and application. Therefore, GAAP is not overly stringent and allows firms to use professional judgment when reporting financial outcomes.

Which of the Following Is NOT True About Generally Accepted