In the phrase "generally accepted accounting principles," the words generally accepted mean that the principles:
A)Have been adopted by Congress or approved by the voters in a general election.
B)Are acceptable to the Internal Revenue Service.
C)Are understood and observed by all the participants in the financial reporting process.
D)Have been approved by a majority of the members of the Financial Accounting Standards Board.

Question

Quizplus · Accepted Answer

The phrase "generally accepted" implies that the principles are widely understood and observed by all the participants in the financial reporting process, including accountants, auditors, and investors. It does not mean that the principles have been approved by Congress or the IRS, or by a specific majority of the members of the Financial Accounting Standards Board.

In the Phrase "Generally Accepted Accounting Principles," the Words Generally