Learning Objective 1-2
1) As per the economic entity assumption, an organization and its owner should be seen as the same entity.
2) The guidelines for accounting information are called Generally Accepted Accounting Principles (GAAP).
3) IFRS is the main U.S. accounting rule book and is currently created and governed by the FASB.
4) A publicly traded company in the United States does not come under SEC regulations as long as it follows the rules of GAAP.
5) International Financial Reporting Standards (IFRS) are the international accounting rules that U.S. companies must follow for their international operations.
6) IFRS are comparatively more specific and more rule based than U.S. GAAP.
7) The Public Company Accounting Oversight Board is a watchdog agency that monitors the work of independent accountants who audit public companies.
8) An examination of a company's financial statements and records is called an audit.
9) The Sarbanes-Oxley Act (SOX) requires companies to review internal control and take responsibility for the accuracy and completeness of their financial reports.
10) In a sole proprietorship, the owner is personally liable for the debts of the business.