Which of the Following Statements Is True Regarding Accounting for Receivables

question 131

Multiple Choice

Which of the following statements is true regarding accounting for receivables under IFRS and U.S. GAAP?

• A) U.S. GAAP has four specifically defined categories for financial assets, which include loans and receivables.
• B) U.S. GAAP accounts for short-term receivables at amortized cost, adjusted for allowances for doubtful accounts, whereas IFRS requires fair value for receivables.
• C) In their current deliberations regarding accounting for financial instruments, it appears that IASB wants amortized costs for receivables, but GAAP is tending toward fair value.
• D) All of these answer choices are correct.

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Definitions:

Investment Interest Expense

The amount of interest paid on debt incurred for investments, allowing taxpayers to deduct it under certain conditions.

Gross Investment Income

The total income generated from various investment sources before any deductions or taxes are applied.

Medical Expense Deduction

A tax deduction allowed for unreimbursed medical expenses that exceed a certain percentage of the taxpayer's adjusted gross income.

Dependent

Dependent is a person, typically a child or elderly family member, whose support and maintenance are provided by another, qualifying the supporting individual for certain tax benefits.