What must every corporation do in maintaining and reporting its financial status?
A) Purchase stocks on margin
B) Use creative accounting practices
C) Support increased stock prices
D) Aim to maximize predicted profit margins
E) Conform to generally accepted accounting principles

Question

Quizplus · Accepted Answer

Every corporation must conform to generally accepted accounting principles (GAAP) in order to maintain and report its financial status accurately and transparently. This includes using consistent accounting methods, disclosing all relevant information, and providing clear and understandable financial statements. Using creative accounting practices to manipulate financial results or artificially inflate stock prices is unethical and illegal, and could result in severe consequences for the company and its stakeholders. Similarly, purchasing stocks on margin and aiming to maximize predicted profit margins are not necessarily requirements for maintaining and reporting financial status, and may even be counterproductive or risky strategies depending on the specific circumstances.

What Must Every Corporation Do in Maintaining and Reporting Its