Question

which of the following statements regarding Standards contained in the FASB accounting standards codification (ASC) is true?

(A) They were created in 2009 when the ASC was created and did not exist prior to that time.
(B) They have to be approved by the SEC before they become effective.
(C) They apply to financial reporting by all U.S. companies.
(D) They have the force of law, and failure to follow them can be prosecuted.

Answer 1

Answer: Option (C) is correct.

Explanation:

The FASB ASC (Accounting Standards Codification) is known as the origin of authoritative GAAP (generally accepted accounting principles) identified by the FASB which is further applied to private entities. FASB ASC(Accounting Standards Codification) applies to financial reporting by all organization in the US. This provides a guideline for these organizations.