GAAP QUESTIONS
1.Which of the following is
false?
a.Under GAAP, a liability is only recognized if it is a present obligation.
b.Under GAAP, current liabilities are shown in order of magnitude.
c.Under GAAP, an item is a current liability if it will be paid within the next 12 months or the operating cycle, whichever is longer.
d.Under GAAP, current liabilities are presented before non-current liabilities.
2.The accounting for bonds payable is
a.not covered by IFRS.
b.the same except that market price may be different because the present value calculations are different between IFRS and GAAP.
c.different in that GAAP requires use of the straight-line method for amortization of bond premium and discount.
d.essentially the same under IFRS and GAAP.
3.Which of the following is
true
regarding accounting for amortization of bond discount and premium?
a.GAAP is required to use the straight-line method.
b.IFRS is required to use the effective-interest method.
c.GAAP must use the effective-interest method, but IFRS may use either the effective-interest method or the straight-line method.
d.Both IFRS and GAAP must use the effective-interest method.
4.The joint projects of the FASB and IASB could potentially
a.change the definition of assets.
b.change the definition of liabilities.
c.change the definition of equity.
d.All of these answer choices are correct.