All of the Following Statements Are True Except

question 39

Multiple Choice

All of the following statements are true except:

• A) The threshold for recording items as liabilities is a lower under IFRS than under U.S.GAAP.
• B) The threshold for recording items as liabilities is a lower under U.S.GAAP than under IFRS.
• C) IFRS requires a liability to be recorded as a present value amount.
• D) Under U.S.GAAP, a contingent item should be recorded as a liability if the loss or outflow is probable and can be reasonably estimated.

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Definitions:

Municipal Bonds

Municipal bonds are debt securities issued by states, cities, and other governmental entities to fund public projects, and typically offer tax-free interest payments to investors.

Tax-exempt Interest

Interest income that is not subject to federal income tax, often received from bonds issued by state and municipalities.

Bonds Issued

Debt securities released by entities such as corporations or governments to raise capital.

Local Government

The administration governing a specific local area such as a city, town, or county, responsible for providing local services and infrastructure and may have its own tax collection policies.