Which of the Following Statements Best Describes the Difference Between

question 16

Multiple Choice

Which of the following statements best describes the difference between U.S.GAAP and IFRS with respect to revenue recognition?

• A) IFRS has a substantial amount of industry specific guidance for revenue recognition.
• B) IFRS revenue recognition is not consistent with U.S.GAAP in principle.
• C) There are subtle differences in the wording of U.S.GAAP as compared with IFRS.
• D) IFRS has four criteria and U.S.GAAP has five conditions for revenue recognition.

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Definitions:

Indirect Method

A cash flow statement approach that adjusts net income for changes in non-cash working capital and other items to calculate operating cash flow.

Cash Flow Classifications

The categorization of cash flows into operating, investing, and financing activities for the purpose of financial reporting and analysis.

Free Cash Flow

The cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

Net Cash Flow

The amount of cash that is generated or lost by a business in a given period, considering cash inflows and outflows from operating, investing, and financing activities.