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

According to GAAP, financial information should possess which of the following characteristics?

Relevance and reliability

Historical cost and secrecy

Comparability and ambiguity

Flexibility and subjectivity

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Verified step by step guidance

Understand the context of the question: GAAP (Generally Accepted Accounting Principles) provides guidelines for preparing financial statements to ensure consistency and transparency.

Identify the key characteristics of financial information under GAAP. These include relevance (information must be useful for decision-making) and reliability (information must be accurate and verifiable).

Eliminate incorrect options: Historical cost and secrecy are not characteristics emphasized by GAAP. Secrecy contradicts the principle of transparency.

Further eliminate options: Comparability is a valid characteristic under GAAP, but ambiguity is not. Financial information should be clear and understandable.

Finally, rule out flexibility and subjectivity, as GAAP emphasizes standardization and objectivity in financial reporting. The correct answer is relevance and reliability.