All of the Following Statements Regarding Recognition of Receivables Under

question 12

Multiple Choice

All of the following statements regarding recognition of receivables under U.S.GAAP and IFRS are true except:

• A)U.S.GAAP and IFRS have similar asset criteria that apply to recognition of receivables.
• B)Receivables that arise from revenue-generating activities are subject to broadly similar criteria for U.S.GAAP and IFRS.
• C)The realization principle under IFRS implies an arm's length transaction occurs.
• D)Both refer to the realization principle and an earnings process.
• E)Differences arise mainly from industry-specific guidance under U.S.GAAP.

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Definitions:

Average Total Asset

A measure used to calculate the average value of a company's assets over a specific period, often used in profitability and efficiency ratios.

Beginning Total Assets

The total value of all assets owned by an entity at the start of a fiscal period, critical for financial analysis and performance tracking.

Ending Total Assets

The total value of a company's assets (such as cash, inventory, property, and investments) at the end of an accounting period.

Profit Margin

A financial metric expressed as a percentage that measures the amount of net income earned with each dollar of sales by comparing net income and net sales.