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What Is GAAP? - The Generally Accepted Accounting Principles

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

How many basic accounting principles make up GAAP?

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1. GAAP sets the standards for the creation of what?

2. Michael, the majority shareholder of a company, decided to produce the company's balance sheet whose cash balance included the cash in his own bank account. Would Michael be allowed to do this by GAAP?

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About This Quiz & Worksheet

This quiz and worksheet combo helps gauge your knowledge of GAAP. Terms you will need to know for the quiz include Economic Entity Assumption and Going Concern Principle.

Quiz & Worksheet Goals

This quiz and worksheet can help you review:

  • Organization that was established after the Stock Market crash of 1929 and is charged with regulating financial practices of publicly traded companies
  • Accounting principle which means that the financial activities of a corporation and that of its owner need to be kept separate
  • What GAAP stands for
  • The purposes of GAAP

Skills Practiced

  • Information recall - access the knowledge you have gained regarding GAAP
  • Knowledge application - use your knowledge to answer questions about the organization that was established after the Stock Market crash of 1929 and is charged with regulating financial practices of publicly traded companies as well as the accounting principle which means that a company plans to continue operations for the long run
  • Interpreting information - verify that you can read information regarding GAAP and interpret it correctly

Additional Learning

To learn more about GAAP, review the accompanying lesson titled What Is GAAP? - The Generally Accepted Accounting Principles. This lesson will help you:

  • Determine what GAAP stands for
  • Define the Economic Entity Assumption
  • Review the Full Disclosure Principle
  • Describe conservatism
  • Understand why the SEC was created
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