Question

Greg is a recent graduate with his accounting degree. He has also sat for and passed the CPA exam. At his new accounting position, he notices that depreciation expense is not calculated in what he understands to be an acceptable accounting method. Greg has decided to approach his supervisor and clarify what he believes to be a discrepancy in standard practices. To make his case, he should refer to:

a) International Financial Reporting Standards (IFRS)
b) Generally Accepted Accounting Principles (GAAP)
c) Sarbanes-Oxley Act
d) Financial Accounting Standards Board (FASB)

Answer 1

Greg should refer to the Generally Accepted Accounting Principles (GAAP). He can also mention the Financial Accounting Standards Board (FASB).

Step-by-step explanation:

To make his case, Greg should refer to the Generally Accepted Accounting Principles (GAAP). GAAP is a set of accounting standards that provide guidelines for financial reporting in the United States. It is widely followed by companies and auditors to ensure consistency and comparability of financial statements.

By referring to GAAP, Greg can explain that depreciation expense should be calculated in a manner consistent with the accepted accounting principles. He can provide examples from GAAP guidelines and highlight the importance of accurate and reliable financial reporting.

Additionally, Greg can mention the Financial Accounting Standards Board (FASB), which is responsible for developing and updating GAAP standards. FASB is recognized as the authoritative body for establishing accounting principles in the United States.