Which of the Following Is a Reason Why the IASB

question 12

Multiple Choice

Which of the following is a reason why the IASB and FASB jointly developed a revenue standard?
I. remove inconsistencies and weaknesses in the current revenue recognition literature;
II. provide a more robust framework for addressing revenue recognition issues;
III. improve comparability of revenue recognition practices across the various industries, entities, jurisdictions and capital markets;
IV. provide a single reference point in order to reduce the volume of the relevant standards and interpretations that entities will need to refer to;
V. provide more useful information to users through enhanced-disclosure requirements.

• A) I, II only
• B) II, III and IV only
• C) I, III and IV only
• D) I, II, III, IV and V

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, encompassing interest payments on debt, loans, and credit lines.

Cost of Goods Sold

Direct expenditures involved in generating the products a company markets, namely materials and labor.

Operating Income

Income generated from a company's primary business activities, excluding deductions for interest and taxes.

Cash Sales

Revenue generated from transactions where payment is made in cash immediately upon purchase.