Question

What is more associated with F/S prepared in accordance with GAAP than with IFRS?

A) Fair value emphasis
B) Principles-based approach
C) Historical cost emphasis
D) Entity-specific disclosure

Answer 1

The correct answer is C) Historical cost emphasis. F/S prepared in accordance with GAAP are more associated with historical cost emphasis than with IFRS. Under GAAP, F/S are prepared based on historical cost, while IFRS allows for fair value measurements and revaluations.

Step-by-step explanation:

The correct answer is C) Historical cost emphasis. Historical cost emphasis is more associated with Financial Statements (F/S) prepared in accordance with Generally Accepted Accounting Principles (GAAP) than with International Financial Reporting Standards (IFRS).

Under GAAP, F/S are prepared based on historical cost, which means assets and liabilities are recorded at their original cost.

On the other hand, IFRS allows for more fair value measurements and revaluations of assets and liabilities, which means F/S prepared in accordance with IFRS may have a fair value emphasis.