Question

To facilitate the combination of utility financial statements with the statements of other enterprise funds, GAAP permits utilities to follow the customary format used by nonutility business organizations.True/False

Answer 1

Answer:

True

Explanation:

Generally Accepted Accounting Principles (GAAP) aims to improve the clarity and comparability of the communication of financial information. As it sets its principles based on four pillars (costs, revenues, matching, and disclosure), it makes it possible for a company to unify in the same format financial statements in most cases. Utility and non-utility financial statements are one of those cases.