IMVAR INC Is a U

question 41

Multiple Choice

IMVAR INC is a U.S.-based Company with subsidiaries in both the United States and in Canada. The Company's Consolidated Financial Statements show a significantly higher net income when prepared under Canadian GAAP than under U.S. GAAP. What is the likely reason for this difference?

• A) Different corporate tax rates in each country.
• B) Timing differences which will reverse out in the future.
• C) Differing reporting requirements in each country.
• D) Currency fluctuations.

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Definitions:

Inventory

The total amount of goods and materials held by a company intended for sale or used in producing goods for sale.

Customer Refunds Payable

An account in the liabilities section of the balance sheet that represents obligations to return money to customers for returned, damaged, or unsatisfactory goods.

Adjusting Entry

A record finalized at the close of a financial period for assigning earnings and costs to the actual period of occurrence.

Estimated Returns Inventory

An accounting method used to estimate the value of goods that are expected to be returned by customers.