All of the Following Statements Regarding Recognition of Receivables Under

question 208

Multiple Choice

All of the following statements regarding recognition of receivables under U.S. GAAP and IFRS are true except:

• A) Under U.S. GAAP, provision refers to a liability whose amount or timing is uncertain.
• B) Differences arise mainly from industry-specific guidance under U.S. GAAP.
• C) The realization principle under GAAP implies an arm's length transaction occurs.
• D) Receivables that arise from revenue-generating activities are subject to broadly similar criteria for U.S. GAAP and IFRS.
• E) U.S. GAAP and IFRS have similar asset criteria that apply to recognition of receivables.

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Definitions:

Differentiating

The process of distinguishing a product or service from others in the market to attract a specific segment of customers.

Barrier to Entry

Obstacles that prevent or hinder new competitors from easily entering an industry or area of business.

Exclusive Rights

Legal rights granted to individuals or firms, limiting others from reproducing, publishing, or selling particular goods or services.

Market Power

The ability of a company or entity to influence the price and production levels in a market.