Which of the Following Accurately Describes the Differences Between the United

question 20

Multiple Choice

Which of the following accurately describes the differences between the United States and the United Kingdom in terms of conservatism in earnings measurement?

• A) The British tend to be more conservative in earnings measurements than do Americans.
• B) British earnings are higher than U.S. earnings because U.S. firms tend to capitalize interest costs relating to certain types of assets during acquisition or construction.
• C) U.S. earnings tend to be lower than British earnings since U.S. firms capitalize and amortize goodwill.
• D) none of the above.

---

Definitions:

Denominations

Distinct categories or units, often used in reference to currencies, religious sects, or other systems of classification.

Face Values

The original value printed on the face of a financial instrument such as a bond or banknote, not necessarily its current market value.

Revenue Bonds

Bonds issued by municipalities or other governmental entities to finance projects that generate income, with the earnings used to repay bondholders.

Toll Road

A public or private roadway for which a fee is charged to use, typically used to fund maintenance and new infrastructure.