Question

Presented below are four statements which you are to identify as true or false. If false, explain why the statement is false.

If false, explain why the statement is false.
1. GAAP is the term used to indicate the whole body of FASB authoritative literature.
2. Any company claiming compliance with GAAP must comply with most standards and interpretations but does not have to follow the disclosure requirements.
3. The primary governmental body that has influence over the FASB is the SEC.
4. The FASB has a government mandate and therefore does not have to follow due process in issuing a standard.

Answer 1

Answer and Explanation:

1. The first statement is true

2. The second statement is false as the company that claims the compliances would comply with the standard, interpretations and the disclosure requirements

3. The third statement is true

4. The fourth statement is false as for creating a standard there si two basic premises i.e.

a. It should be responsive to the needs and the viewpoints with respected to the overall economic community

b. It should be operated in complete public view