The generally accepted accounting principles (GAAP)require that the EPS be calculated using a
A)conservative treatment.
B)liberal treatment.
C)standard set of rules developed by the accounting profession.
D)standard set of rules developed by the SEC.

Question

Quizplus · Accepted Answer

GAAP is the set of accounting principles and guidelines developed by the accounting profession. These principles provide a standard framework for financial reporting, ensuring that financial statements contain consistent, reliable, and comparable information. As EPS is an important measure of a company's profitability, it is necessary to calculate it using the GAAP guidelines to provide a standardized, reliable measure of a company's earnings per share. Therefore, option C, which states that the EPS is calculated using a standard set of rules developed by the accounting profession, is the correct choice.

The Generally Accepted Accounting Principles (GAAP)require That the EPS Be