Which of the Following Statements Is True About the IASB's

question 40

Multiple Choice

Which of the following statements is true about the IASB's approach to accounting standard setting?

• A) The IASB approach is very similar to the rules-oriented basis favored by the FASB in the United States.
• B) The IASB uses a principles-based approach to standards formulation.
• C) The IASB pronouncements have been called a "cookbook" of accounting standards.
• D) The Sarbanes-Oxley Act requires the IASB to move toward the approach for standard setting used by the FASB.

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Definitions:

Promissory Note

A written, legally binding promise to pay a specified sum of money to a designated person at a specified date or upon demand.

Compounded Semiannually

Interest calculation method that applies the interest to the principal balance and the accumulated interest twice each year.

Simple Annualized Yield

A calculation of investment earnings that does not account for compounding within the year, expressed as an annual rate.

Effective (Annualized) Yield

The effective, or annualized yield, calculates the return on an investment by taking into account the effect of compounding interest over a one-year period.