Which of the following statements is true of the generally accepted accounting principle (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 sets rules for how corporations must set their accounts on their financial statements. It is not just a guide for auditors, nor is it the accepted form of accounting principles around the world. While GAAP can be modified, any changes must go through a careful process of review and approval by accounting standard-setting bodies.

Which of the Following Statements Is True of the Generally