IFRS Tends to Be More Principles-Based Compared with GAAP,which Is

question 115

Multiple Choice

IFRS tends to be more principles-based compared with GAAP,which is viewed as more rules-based.Which of the following is a true statement about a principles-based system?

• A)A principles-based system eliminates the need for internal controls.
• B)A principles-based system is significantly weaker than a rules-based system.
• C)A principles-based system will eliminate all fraud.
• D)A principles-based system is a way to calculate interest receivable or payable.
• E)A principles-based system depends heavily on control procedures to reduce the potential for fraud or misconduct.

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Definitions:

Raw Materials

Basic materials that are in their natural, unprocessed form, used as inputs for production in manufacturing, construction, and other industries.

JIT

Just-in-Time is a management strategy that aligns raw-material orders from suppliers directly with production schedules.

Distribution Systems

Networks and processes involved in moving a product from the supplier to the customer, including logistics, warehousing, and retailing.