Which of the Following Statements Is True Regarding International Financial

question 68

Multiple Choice

Which of the following statements is true regarding International Financial Reporting Standards (IFRS) and U.S. GAAP?

• A) IFRS allows both the perpetual and periodic systems, but U.S GAAP permits only the perpetual system.
• B) IFRS requires a single-step income statement, but U.S. GAAP allows either the single-step or the multiple-step income statement.
• C) U.S. GAAP allows operating expenses to be reported by either function or nature, IFRS requires reporting by function.
• D) IFRS requires 2 years of income statements, U.S. GAAP requires 3 years of income statements.

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Definitions:

Variable Overhead

Costs that fluctuate with the level of output or production activity, such as utilities for a manufacturing line.

Budgeted Variable Overhead

Estimated costs related to variable overhead that are planned or expected for a specific period in the budgeting process.

Volume Variance

A measure used in costing to indicate the difference between expected production volumes and the actual volumes produced, affecting costs.

Fixed Factory Overhead

Indirect, consistent costs associated with operating a manufacturing facility, such as salaries of supervisors and rent.