Question

Which of the following statements is not true?

a.Both public and private corporations issue shares.

b.All private corporations are small.

c.Public corporations must use International Financial Reporting Standards.

d.Private corporations can choose to use either International Financial Reporting Standards (IFRS) or Accounting Standards for Private Enterprises (ASPE).

Answer 1

Answer: (b) All private corporations are small.

Analysis: Private corporation is the business that is not owned by the government, non-governmental organizations or by a relatively small number of shareholders or company members which does not offer or trade its company stock (shares) to the general public on the stock market exchanges, but rather the company's stock is offered, owned and traded or exchanged privately or over-the-counter. They are not intended to be small.

We know, both private and public corporation issues shares ,though more restrictions are imposed on private corporations.

Public corporation should comply with IFRS standards according to the regulations and whereas Private corporations has an option to choose either IFRS OR ASPE.

In either case( i.e., in selection of IFRS OR ASPE), the private enterprise may then state that its financial statements have been prepared in accordance with choose standards.

Hope this helps you, Thank You!?