In a Principles-Based Standard-Setting System (Such as Canadian GAAP), Compared

question 28

Multiple Choice

In a principles-based standard-setting system (such as Canadian GAAP) , compared to a rules-based approach (such as U.S. GAAP) ,

• A) which is more prescriptive, it may be easier to defend how to account for a particular item.
• B) there is a rule for every situation.
• C) accountants either apply specific standards based on the conceptual framework, or, professional judgement consistent with the framework.
• D) it is expected that professional accountants might encounter situations where they are unable to apply the principles appropriately.

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Definitions:

Free Rider

An individual who benefits from resources, goods, or services without paying for them, relying on others to bear the cost.

Fundraising Efforts

Activities or strategies implemented to gather financial support for a particular cause or project.

Common Resource

A type of good that is accessible to all members of society but has limited availability, leading to potential overuse or depletion.

Admittance Fee

A charge for entering a place or participating in an event, often used in contexts like museums, parks, or exhibitions.