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T/F: The monetary unit assumption is a part of GAAP, but not IFRS.

1 Answer

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Final answer:

The monetary unit assumption is indeed a part of both GAAP and IFRS, as this assumption dictates that financial transactions should be recorded in a single, stable currency.

Step-by-step explanation:

The statement that the monetary unit assumption is a part of GAAP but not IFRS is false. Both the Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS) include the monetary unit assumption as a foundational accounting principle. This assumption states that all financial transactions and statements are recorded using a single, stable currency, which facilitates consistency in financial reporting and comparison of financial statements over different periods. It is important in business to maintain a stable measure of value, which is why this assumption is integral to both accounting frameworks.

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