GAAP's Definition for Inventory and Provision of Guidelines for Inventory

question 1

Short Answer

GAAP's definition for inventory and provision of guidelines for inventory accounting as compared to IFRS are: $\begin{array} { l c } &\text { Guideliness for } \\ \underline{\text { Definitions for Inventory }}& \underline{\text { inventory accountin } }\end{array}$
A) $\begin{array} { l c } \text { Definitions for Inventory } & \text { more detailed } \\\end{array}$
B) $\begin{array} { l c } \text { essentially similar } &&&& \text { more detailed } \\\end{array}$
C) $\begin{array} { l c } \text { essentially different } &&& \text { less detailed } \\\end{array}$
D) $\begin{array} { l c } \text { essentially different } &&& \text { less detailed }\end{array}$

• A)\(\begin{array} { l c } \text { Definitions for Inventory } & \text { more detailed } \\\end{array}\)
• B)\(\begin{array} { l c } \text { essentially similar } &&&& \text { more detailed } \\\end{array}\)
• C)\(\begin{array} { l c } \text { essentially different } &&& \text { less detailed } \\\end{array}\)
• D)\(\begin{array} { l c } \text { essentially different } &&& \text { less detailed }
• \end{array}\)

---

Definitions:

Prior Period Adjustment

Adjustments made to amend previously issued financial statements for errors or changes in accounting principles.

Depreciation Expense

The systematic allocation of the cost of tangible assets over their useful lives, reflecting wear and tear or obsolescence.

Loss Recognition

The accounting principle of acknowledging and recording a loss in the financial statements when it is realized or when there is no longer any doubt about its occurrence.

Uncollectible Accounts

Debts owed to a company that are deemed uncollectable and written off as a bad debt expense.