All of the Following Statements Regarding Accounting Treatments for Liabilities

question 95

Multiple Choice

All of the following statements regarding accounting treatments for liabilities under U.S. GAAP and IFRS are true except:

• A) Accounting for bonds and notes under U.S. GAAP and IFRS is similar.
• B) Both U.S. GAAP and IFRS require companies to record costs of retirement benefits as employees work and earn them.
• C) Both U.S. GAAP and IFRS require companies to distinguish between operating leases and capital leases.
• D) The criteria for identifying a lease as a capital lease are more general under IFRS.
• E) Use of the fair value option to account for bonds and notes is not acceptable under U.S. GAAP or IFRS.

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Definitions:

Monopolist

A monopolist is a single seller in a market who has significant control over the price and supply of a product or service.

Competitive Labor Market

A market where numerous buyers (employers) and sellers (workers) meet, with the price of labor (wages) determined by the supply of and demand for labor.

Marginal Product

The additional output resulting from one more unit of a certain input, keeping other inputs constant.

Monopolistic Distributor

A single seller or distributor in a market that controls a large portion of the market share, limiting competition.