The Primary Historical Reason for the FASB Reversing Its Positions

question 110

Multiple Choice

The primary historical reason for the FASB reversing its positions when political pressures occur is:

• A)The cost of gathering data was prohibitive.
• B)The difficulties in measurement were too great.
• C)They have no authority in such situations.
• D)The SEC did not support the FASB position.

---

Definitions:

Shareholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the net worth attributable to shareholders.

Inventory

The goods and materials that a business holds for the ultimate goal of resale or processing.

Liquidity

Refers to the ease with which an asset can be converted into cash without affecting its market price.

Capital Structure

The specific mixture of debt and equity used by a firm to finance its overall operations and growth.