Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

15. GAAP vs IFRS

GAAP vs. IFRS: Introduction

Financial Accounting

15. GAAP vs IFRS

GAAP vs. IFRS: Introduction

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Multiple Choice

Similarities between U.S. GAAP and IFRS include which of the following?

Both allow the use of LIFO inventory costing method.

Both require financial statements to be prepared in accordance with U.S. federal tax law.

Both require the use of accrual accounting for financial statements.

Both prohibit the revaluation of property, plant, and equipment.

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Verified step by step guidance

Understand the context of the problem: The question is asking about similarities between U.S. GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards). These are two major accounting frameworks used globally.

Analyze each option provided: Evaluate whether each statement aligns with the principles of U.S. GAAP and IFRS. For example, determine if both frameworks allow or prohibit certain practices, such as LIFO inventory costing or revaluation of assets.

Focus on accrual accounting: Both U.S. GAAP and IFRS require the use of accrual accounting for financial statements. Accrual accounting recognizes revenues and expenses when they are incurred, regardless of when cash is exchanged.

Clarify differences in inventory costing methods: Note that IFRS prohibits the use of LIFO (Last-In, First-Out) inventory costing method, while U.S. GAAP allows it. This is a key difference between the two frameworks.

Address revaluation of property, plant, and equipment: IFRS allows the revaluation of property, plant, and equipment to fair value, while U.S. GAAP prohibits this practice. This is another significant difference between the two frameworks.