A Joint Memorandum of Understanding Between the International Accounting Standards

question 43

Multiple Choice

A joint Memorandum of Understanding between the International Accounting Standards Board (IASB) and US Financial Accounting Standards Board (FASB) ,published in 2006:

• A) agreed to maintain the status quo, and retain international and US accounting standards in the form that they currently exist.
• B) identified a number of options to ensure complete consistency between international and US accounting standards by 2010.
• C) identified an intention to implement actions to identify and remove major accounting differences in specific areas by 2008.
• D) identified an agreement that international standards will be changed to accord with US standards, wherever there were key differences, by 2008.
• E) identified a goal that all international and US accounting standards be totally harmonised by 2008.

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Definitions:

Planning and Control Tool

Instruments or techniques used in the management process to set objectives, assess future trends, and oversee progression towards desired outcomes.

Acid-Test Ratio

A financial metric used to determine a company's short-term liquidity situation by comparing its most liquid assets, excluding inventory, to its current liabilities.

Current Assets

Short-term assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle, including cash, inventory, and receivables.

Inventory

The total amount of goods and materials held in stock by a business or organization.