Question

True or False

A. Publicly-traded U.S. companies are able to supplement GAAP figures with additional non-GAAP figures they deem necessary.

B. The financial accounting standard board (FASB) establishes the rules for General Accounting Principles (GAAP)

C. Generally Accepted Accounting Principles are a set of accounting rules, standards, and financial reporting practices utilized in the U.S.

D. The realization or recognition principle dictates that revenues are recognized upon the delivery of products or services, regardless of when cash is exchanged.

Answer 1

Ans a) True

Reason :- Many companies report non-GAAP earnings in addition to their earnings based on Generally Accepted Accounting Principles (GAAP). Because Non GAAP figures can sometimes provide a more accurate measure of a company's financial performance from direct business operations .

Ans b) True

Reason :- FASB establishes the rules for General Accounting Principles (GAAP) and has pronuncements for this which are referred to as Financial Accounting standards (FAS)

Ans c) True

Reason :- Generally accepted accounting principles, or GAAP, are a set of rules that encompass the details, complexities, and legalities of business and corporate accounting .  Public companies in the United States must follow GAAP when their accountants compile their financial statements.

Ans d) True

Reason :- The revenue recognition principle is an accounting principle that requires revenue to be recorded only when it is earned. It means that revenues or income should be recognized when the services or products are provided to customers regardless of when the payment takes place.