Which of the Following Statements About the Use of GAAP

question 36

Multiple Choice

Which of the following statements about the use of GAAP for private companies is true?

• A)Private companies must use IFRS.
• B)Private companies must use Accounting Standards for Private Enterprises.
• C)Private companies may use either full IFRS or Accounting Standards for Private Enterprises.
• D)Private companies may use either modified IFRS or Accounting Standards for Private Enterprises.

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Definitions:

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, but not control them.

Common Stock

Equities representing ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Equity Method

An accounting technique used to record investments in other companies, where the investment's value is adjusted to reflect the investor's share of the company's post-acquisition earnings or losses.