1. Why is it acceptable for financial accounting to be imprecise?

2. What is materiality?

3. How is materiality determined?

4. What is a misstatement?

5. When is a misstatement considered fraud?

6. Give three examples of uncertainties faced by businesses.

7. Define U.S. GAAP.

8. Why is GAAP so important to the capital market system in the United States?

9. Who creates U.S. GAAP?

10. Define asset and give an example of one.

11. Define liability and give an example of one.

12. Define revenue.

13. Define expense.