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:

Functional Currency

The primary currency of the primary economic environment in which an entity operates, used in its financial reporting.

Subsidiary

A company controlled by another company, known as the parent company, through the ownership of more than half of its voting stock.

Inventory

The raw materials, work-in-progress products, and finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.