Accounting Standards (IFRS, GAAP) MCQ Multiple Choice Questions - Page 2 for Practice

Correct Answer is: Revenues and profits should not be overstated, and expenses and losses should not be understated

Correct Answer is: The assumption that a company will continue to operate in the foreseeable future

Correct Answer is: Accounting policies should remain consistent from period to period unless there is a valid reason for change

Correct Answer is: IFRS

Correct Answer is: Revenue is the gross inflow of economic benefits arising from ordinary activities of an entity, while income is revenue minus expenses

Correct Answer is: Expenses are costs that are directly related to the generation of revenue, while costs are all the expenses incurred by an entity

Correct Answer is: Assets are resources controlled by the entity as a result of past events, while liabilities are present obligations of the entity arising from past events

Correct Answer is: Equity represents the ownership interest in a company, while liabilities represent the debts of a company

Correct Answer is: Inventory is held for sale, while fixed assets are used in the production process

Correct Answer is: Tangible assets have physical substance, while intangible assets do not

Correct Answer is: Current assets are expected to be converted into cash within one year, while non-current assets are not

Correct Answer is: Current liabilities are expected to be settled within one year, while non-current liabilities are not

Correct Answer is: Revenue arises from the ordinary activities of an entity, while gains arise from incidental or peripheral activities

Correct Answer is: Expenses arise from the ordinary activities of an entity, while losses arise from incidental or peripheral activities

Correct Answer is: To ensure comparability and reliability of financial statements

Correct Answer is: Depreciation is the systematic allocation of the cost of a tangible asset over its useful life, while amortization is the systematic allocation of the cost of an intangible asset over its useful life

Correct Answer is: A loss in the value of an asset below its carrying amount

Correct Answer is: Income statement, balance sheet, statement of cash flows, statement of changes in equity

Correct Answer is: A company's revenues and expenses over a period of time

Correct Answer is: A company's financial position at a point in time

Correct Answer is: A company's cash flows over a period of time

Correct Answer is: The changes in a company's equity over a period of time

Correct Answer is: International Accounting Standards Board (IASB)

Correct Answer is: Financial Accounting Standards Board (FASB)

Correct Answer is: In their specific rules and interpretations for certain accounting transactions

Correct Answer is: An effort to reduce the differences between IFRS and GAAP