The Most Significant Difference Between Accounting Principles Used in Brazil

question 16

Multiple Choice

The most significant difference between accounting principles used in Brazil and those employed in the United States is

• A) accounting for inflation.
• B) depreciation accounting.
• C) the fact that consolidated financial statements are not issued in Brazil.
• D) the fact that Brazilian corporations do not pay income tax.

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Definitions:

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, thus having a financial stake and certain rights in the company.

RMBCA

The Revised Model Business Corporation Act (RMBCA) is a set of model laws prepared by the American Bar Association to provide a standard for the governance of corporations.

Pre-incorporation Subscription

An agreement by an investor to purchase shares in a corporation that is yet to be formed, contingent upon the actual incorporation of the company.

Revoked

The action of withdrawing, cancelling, or annulling something previously granted, such as a license, privilege, or legal right.