Indicate whether each of the five statements presented below is true or false. Review basic concepts.

1. The three steps in the accounting process are identification, recording, and examination. (LO 1, 2, 4)

2. The two most common types of external users are investors and creditors.

3. Congress passed the Sarbanes-Oxley Act to ensure that investors invest only in companies that will be profitable.

4. The primary accounting standard-setting body in the United States is the Securities and Exchange Commission (SEC).

5. The cost principle dictates that companies record assets at their cost and continue to report them at their cost over the time the asset is held.