Question

In week 5, Ginny recorded the sales on cash basis, you will use revenue recognition to analyze this issue. What standards will you apply?

a) ASPE only
b) IFRS only
c) Both ASPE and IFRS
d) Neither ASPE nor IFRS

Answer 1

The standards that will be applied to analyze Ginny's sales on a cash basis are both ASPE and IFRS. The correct option is c.

Step-by-step explanation:

The standards that will be applied to analyze Ginny's sales on a cash basis are both ASPE and IFRS. ASPE (Accounting Standards for Private Enterprises) is the accounting standard used in Canada for private companies, whereas IFRS (International Financial Reporting Standards) is used globally for public companies.

By applying both ASPE and IFRS, you can ensure that the revenue recognition principles and guidelines are adequately addressed for reporting purposes.

For example, under ASPE, the revenue recognition principle states that revenue should be recognized when it is earned and can be measured reliably. IFRS has a similar principle where revenue is recognized when it is probable that economic benefits will flow to the entity and can be reliably measured.

By assessing the sales on a cash basis according to these standards, you can accurately analyze and report the revenue generated by Ginny. The correct option is c.