Question

All of the following statements related to U.S. GAAP and IFRS are true except: Multiple Choice The closing process for merchandisers is the same under both systems. U.S. GAAP offers little guidance about the presentation order of expenses. Accounting for basic inventory transactions is the same under the two systems. Neither system requires separate disclosure of items when their size, nature, or frequency are important. Neither system defines operating income.Incorrect

Answer 1

Answer:

Neither system requires separate disclosure of items when their size, nature, or frequency are important.

Explanation:

IFRS is an acronym for International Financial Reporting Standards, it comprises of a set of accounting standards or rules issued by the International Accounting Standards Board (IASB). The International Financial Reporting Standards ensures that statement of income, when reported by accountants is consistent, transparent and comparable globally.

On the other hand, GAAP is an acronym for Generally Accepted Accounting Principles, it comprises of the accounting standard, procedures and principles used by public institutions in the United States of America. The U.S GAAP is issued by the Financial Accounting Standards Board (FASB) and adopted by the U.S. Securities and Exchange Commission (SEC).

Generally, there are some similarities in the operations of both governmental agencies and these are;

1. The closing process for merchandisers is the same under both systems.

2. U.S. GAAP offers little guidance about the presentation order of expenses.

3. Accounting for basic inventory transactions is the same under the two systems.

4. Neither system defines operating income.

However, the statement that neither system requires separate disclosure of items when their size, nature, or frequency are important is incorrect or false because all disclosure of items are presented together.