Which of the Following Statements Is True

question 13

Multiple Choice

Which of the following statements is true?

• A)IFRS relies less heavily on fair market value accounting than does US GAAP.
• B)IFRS relies more heavily on fair market value accounting than does US GAAP.
• C)Neither IFRS nor US GAAP will use fair market value accounting in the near future.
• D)Only US GAAP uses fair value market accounting.

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Definitions:

Depreciation

The accounting method of allocating the cost of a tangible asset over its useful life, representing wear and tear, decay, or decline in value.

Contribution Margin

The portion of sales revenue that exceeds variable costs, contributing towards covering fixed costs and generating profit.

Variable Cost

Costs that change in proportion with the level of output or activity, such as raw materials and labor costs.