1. Which of the following is NOT TRUE of generally accepted accounting principles? a. GAAP is influenced by pronouncements of the SEC. b. GAAP changes over time as the nature of the business environment changes. c. GAAP does have substantial authoritative support. d. GAAP includes broad guidelines of general application without detailed practices and procedures. 2. Which of the following element of financial statements arises from ongoing major or central operations? a. Interest revenue Selling, general and administrative expenses c. Loss on disposal of fixed assets d. Gain on investments 3. The characteristic that is demonstrated when a high degree of consensus can be secured among independent measurers using the same measurement methods is: a. relevance b. faithful representation c. verifiability d. neutrality 4. Stockholders' equity is NOT affected by all a. cash receipts b. dividends c. revenues d. expenses 5. The accounting equation must remain in balance a. throughout each step in the accounting cycle. b. only when journal entries are recorded. c. only at the time the trial balance is prepared. d. only when formal financial statements are prepared