Which of the Following Is Generally True About the Differences

question 18

Multiple Choice

Which of the following is generally true about the differences between U.S. GAAP and IFRS?

• A) U.S. GAAP is more flexible than IFRS.
• B) U.S. GAAP tends to be more rules-based and IFRS tend to be principles-based.
• C) More professional judgment is required to apply U.S. GAAP than is required for implementing IFRS.
• D) In all cases, U.S. GAAP is more detailed than the IFRS.

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Definitions:

Contributed Capital

The total value of the capital that shareholders have directly invested in the company through the purchase of its stock.

Earned Capital

The portion of shareholders' equity derived from profitable operations, representing retained earnings and not contributed capital.

Common Shares

Equity investments that represent a unit of ownership in a corporation and give shareholders voting rights and dividends.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, giving more weight to some numbers than others.