Why this is mistaken
Acceptability establishes that the candidate principle is within GAAP. Preferability establishes why this entity should change from its existing acceptable principle. The second burden remains even when peers commonly use the alternative.
Where to watch
When this mistake may appear
- GAAP permits more than one accounting principle.
Check your work
Your work may contain this mistake if:
- Cites acceptability but gives no entity-specific preferability analysis.