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Chapter 1: Q. 2SE (page 33)

Suppose you are starting a business, Wholly Shirts, to imprint logos on T-shirts. In organizing the business and setting up its accounting records, you take your information to a CPA to prepare financial statements for the bank. Name the organization that governs the majority of the guidelines that the CPA will use to prepare financial statements for Wholly Shirts. What are those guidelines called?

Short Answer

Expert verified

Financial Accounting Standards Board (FASB) governs the guidelines, and these guidelines are known as GAAP.

Step by step solution

01

Explanation on FASB

FASB is a private organization in the U.S. which is responsible for the creation and monitoring of accounting standards.

02

Explanation on GAAP

Generally Accepted Accounting Principles (GAAP) is the main accounting rule book. It helps in the preparation of financial statements accurately and widely acceptable.

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What is accounting?

Which concept states that accounting information should be complete, neutral, and free from material error?
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