Which of the Following Statements Regarding Reporting Under GAAP and IFRS

question 16

Multiple Choice

Which of the following statements regarding reporting under GAAP and IFRS is not true:

• A) The definition of a liability under GAAP and IFRS involves three basic criteria.
• B) After acquisition, one of two asset measurement systems is applied.
• C) The definition of an asset under GAAP and IFRS involves three basic criteria.
• D) Both GAAP and IFRS define the initial asset value as historical cost for nearly all assets.
• E) Both GAAP and IFRS define the initial asset value as replacement value.

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Definitions:

Lockbox System

A service provided by banks to companies for the collection of payments from customers, involving the use of a special address (PO Box) where customers send their payments.

Treasury Bills

Short-term U.S. government debt obligations with a maturity of one year or less, considered a safe and liquid investment.

Anticipated Daily Savings

Expected savings that are calculated based on daily expenditures, often used in budgeting and financial planning.

Disbursement Float

The time lag between the issuance of a check by a payer and the actual deduction of funds from the payer's account.