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GAAP vs. IFRS: Merchandising definitions Flashcards

GAAP vs. IFRS: Merchandising definitions
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  • GAAP
    A set of accounting rules established by the Financial Accounting Standards Board, primarily used in the United States.
  • IFRS
    A global set of accounting standards developed by the International Accounting Standards Board for international financial reporting.
  • Merchandising Operations
    Business activities focused on buying and selling goods, with specific accounting rules for inventory and income reporting.
  • Perpetual Inventory System
    A method where inventory records are updated continuously as transactions occur, reflecting real-time inventory levels.
  • Periodic Inventory System
    A method where inventory updates occur at specific intervals, requiring physical counts to determine ending inventory.
  • Inventory
    Goods held for sale in the normal course of business, with similar definitions under both GAAP and IFRS.
  • Income Statement
    A financial report showing revenues and expenses over a period, with format requirements differing between GAAP and IFRS.
  • Net Income
    The result of total revenues minus total expenses, representing the main measure of profitability on the income statement.
  • Comprehensive Income
    A broader measure of financial performance that includes net income and other items like asset revaluations.
  • Revaluation
    The adjustment of long-term asset values to reflect fair market value, impacting comprehensive income under IFRS.
  • Fair Value
    An estimate of the price at which an asset could be exchanged in an orderly transaction between market participants.
  • Financial Accounting Standards Board
    The U.S. organization responsible for establishing and maintaining GAAP.
  • International Accounting Standards Board
    The global body that develops and issues IFRS for use in international financial reporting.
  • Single-Step Income Statement
    A format that groups all revenues and all expenses together, with no distinction between operating and non-operating items.
  • Multi-Step Income Statement
    A format that separates operating revenues and expenses from non-operating items, providing detailed profit analysis.