The Early (1973-1988) Harmonization Efforts of the International Accounting Standards

question 21

Multiple Choice

The early (1973-1988) harmonization efforts of the International Accounting Standards Committee (IASC) created standards that have been described as a "lowest-common-denominator" approach. What was the effect of these first international accounting standards?

• A) The IASC standards accommodated existing accounting practices in various countries.
• B) Comparability of financial statements across countries was achieved.
• C) It resulted in few companies being in compliance with IASC standards.
• D) All of the above

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Definitions:

Pretax Profit

Earnings before tax, indicating the profitability of a business before accounting for tax obligations.

Net Profit

The amount of money earned by a company after all expenses and taxes have been subtracted from total revenue.

Leverage Ratio

A financial ratio indicating the degree to which a company or individual is financing its operations through debt, compared to its equity.

LIFO

"Last In, First Out," an inventory management method where the most recently produced or acquired items are the first to be used or sold.