Q1ISTQ - Intermediate Accounting (Kieso)

Question

1. IFRS stands for:

(a) International Federation of Reporting Services. 

(b) Independent Financial Reporting Standards. 

(c) International Financial Reporting Standards. 

(d) Integrated Financial Reporting Services.

Step-by-Step Solution

Answer

Option (c) International financial reporting standards are correct.

Step 1: Definition of Accounting Standards

Accounting standards can be defined as the common principles and procedures that provide information regarding basic accounting practices. The standards promote comparability and transparency of the financial statement.

Step 2: Explanation for the correct option

The correct option is (c) because the full form of IFRS is International financial reporting standards. These standards reflect the rules and regulations that a business entity must follow while financial reporting to become consistent, comparable, and transparent.

Step 3: Explanation for incorrect options

All other options are incorrect because IFRS does not stand for any of them:

1. International Federation of reporting services.
2. Independent financial reporting standards.
3. Integrated financial reporting services.