True or False 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. Most countries require companies to follow U.S. GAAP in preparing their financial statements. Companies face many uncertainties when preparing their financial statements. A liability is defined as a future economic benefit that an organization owns or controls. Creation of U.S. GAAP is primarily done by the US government. In order for investors to evaluate the financial information of a company, it is vital that the financial information be exact. Materiality depends on the size of the organization. Material misstatements made on financial statements are acceptable as long as there are only a few of them. An example of an uncertainty faced by companies in financial statements is a pending lawsuit. Only accountants need to understand the terminology of accounting. Accountants are directed to be conservative not unbiased. Inflation is an important consideration in reporting financial information. Investors are considered by GAAP to be the primary users of financial information. Full disclosure is probably more important with bad news than good news. An employee is an example of an asset. A sale is usually considered revenue even if cash is not collected. The purchase of a building is recorded as an expense. A deliberate misstatement is known as fraud