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

Which of the following statements best describes the relationship between U.S. GAAP and IFRS standards?

IFRS is only used in the United States, while U.S. GAAP is used internationally.

U.S. GAAP and IFRS are identical in all accounting standards and applications.

U.S. GAAP is principles-based, while IFRS is rules-based.

Both U.S. GAAP and IFRS include some similar accounting standards, but there are significant differences in their approaches and requirements.

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Verified step by step guidance

Understand the context: U.S. GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards) are two major accounting frameworks used globally. U.S. GAAP is primarily used in the United States, while IFRS is widely adopted internationally.

Clarify the nature of the frameworks: U.S. GAAP is considered rules-based, meaning it provides detailed and specific guidelines for accounting practices. IFRS, on the other hand, is principles-based, focusing on broader concepts and allowing for more interpretation.

Identify similarities: Both U.S. GAAP and IFRS share some common accounting standards, such as the treatment of revenue recognition and financial statement presentation. However, they differ significantly in their approaches and requirements.

Highlight differences: For example, U.S. GAAP often provides more detailed guidance for specific industries, while IFRS emphasizes professional judgment and flexibility. This can lead to differences in how transactions are recorded and reported.

Conclude the relationship: The correct statement is that both U.S. GAAP and IFRS include some similar accounting standards, but there are significant differences in their approaches and requirements. This reflects the coexistence of these frameworks in the global accounting landscape.