Concept explainers
1.
Sarbanes Oxley Act: Sarbanes Oxley Act was established by the U.S. government to protect the interest of the investors from the companies.
Ethics: Ethics refer to the moral principles and practices that a company shall adopt for the operation of its business.
Securities and Exchange Commission (SEC): SEC is an independent body set up by the U.S. government whose main objective is to protect the investors from any fraudulent activity by the companies.
Historical Cost Principle: The historical cost principle is the concept in accounting which states that the assets should be recorded at the value at which they were purchased
Monetary Unit Assumption: The monetary unit assumption is the concept in accounting that assumes that the events that have a monetary value are the only events that are recorded in the books.
To identify: Whether the given statement is true or false.
Statement: Congress passed the Sarbanes Oxley Act to ensure that investors invest only in companies that will be profitable.
2.
To identify: Whether the given statement is true or false.
Statement: The standards of conduct by which actions are judged as loyal or disloyal are ethics.
3.
To identify: Whether the given statement is true or false.
Statement: The primary accounting standard-setting body in United States is Securities and Exchange Commission.
4.
To identify: Whether the given statement is true or false.
Statement: The historical cost principle dictates that companies record assets at their cost and continue to report them at their cost over the time the assets are held.
5.
To identify: Whether the given statement is true or false.
Statement: The monetary unit assumption requires that companies record only transactions that can be measured in money.
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Chapter 1 Solutions
ACCOUTING PRIN SET LL INCLUSIVE
- Calculate freshmarts return on assets for the yeararrow_forwardgeneral accounting correct answer pleasearrow_forwardDavenport Sweets Inc. sold its chocolate division, resulting in a loss of $80,000. Assuming a tax rate of 30%, the loss on this disposal will be reported on the income statement at what amount?arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
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