Question

True or False: As long as the information reported follows the generally accepted accounting principles (GAAP) guidelines, accountants in a firm have the liberty to use personal judgment to report transactions in the firm’s financial statements.

Answer 1

The given statement is true.

Explanation:

Yes this is true.

GAAP is a collection of certain standard accounting rules for financial reporting.

Few general principles of GAAP guidelines are :

1. Principle of Regularity.

2. Principle of Sincerity.

3. Principle of Consistency.

4. Principle of Non-Compensation.

5. Principle of Continuity.