The Judge's Decision in the "Continental Vending" Court Case

question 18

Multiple Choice

The judge's decision in the "Continental Vending" court case:

• A) Made GAAP mandatory for all financial statements
• B) Held that compliance with international accounting standards, rather than American accounting standards, was acceptable in the presentation of audited financial statements if the statements would predominantly be distributed to readers outside the United States
• C) Held that compliance with international accounting standards, rather than American accounting standards, was acceptable in the presentation of audited financial statements if the statements would exclusively be distributed to readers outside the United States
• D) Made deviation from GAAP-based presentations mandatory if the application of GAAP would be misleading

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Definitions:

Required Return

The minimum expected return an investor anticipates or requires from an investment to compensate for its risk.

Financial Break-even

Financial break-even is the point at which a company's revenues exactly cover its expenses and financial charges, resulting in neither profit nor loss.

Net Present Value

The difference between the current value of cash inflows and the current value of cash outflows over a period of time, used to assess the profitability of an investment.