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The Securities and Exchange Commission (SEC) is a government agency that has legal authority to establish GAAP. ()

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Physical counts of inventory: ()

Are not necessary under the perpetual system.
B. Are necessary to adjust the Inventory account to the actual inventory available.
C. Must be taken at least once each day.
D. Are not necessary under the cost-to benefit constraint.

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The five fundamental principles of accounting information systems are: ()

A. Control, relevance, compatibility, flexibility, and cost-benefit.
B. Historical cost, relevance, compatibility, flexibility, and cost-benefit.
Control, accountability, relevance, compatibility, and flexibility.
D. Control, relevance, compatibility, flexibility, and safety.

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Liabilities is the owner’s claim on assets, and is also called net assets or residual equity. ()

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Depreciation expense for a period is the portion of a plant asset's cost that is allocated to that period. ()

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