All public companies that are traded on a stock exchange and governed by the Securities and Exchange Commission must prepare financial statements following
A)Accounting principles set by the Federal Trade Commission.
B)Generally accepted accounting principles.
C)Generally appropriate accounting standards.
D)Standards set by the Accounting Principles Board.

Question

Quizplus · Accepted Answer

Public companies that are traded on a stock exchange and governed by the Securities and Exchange Commission must prepare financial statements following Generally accepted accounting principles (GAAP). GAAP is a set of accounting principles, standards, and procedures that companies use to compile their financial statements. The other options are incorrect because the Federal Trade Commission does not set accounting principles, "generally appropriate accounting standards" is not a commonly used term in accounting, and the Accounting Principles Board is no longer in existence.

All Public Companies That Are Traded on a Stock Exchange