Which of the Following Statements Concerning Interim Financial Reports Is

question 13

Multiple Choice

Which of the following statements concerning interim financial reports is incorrect?

• A)Accrual accounting is used for revenue and expense recognition.
• B)Extraordinary items are reported in annual but not interim financial reports.
• C)LIFO liquidation is not reported for interim purposes, unless decline in inventory is expected to be permanent.
• D)Income taxes are accrued using effective tax rate expected for the annual period.

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Definitions:

Pre-Specified Period

A defined time frame agreed upon or determined before the start of a certain process or event.

Discounted Payback Period

The time it takes to break even from an investment based on the present value of its cash flows.

Projects

Specific tasks or endeavors undertaken by individuals or organizations to achieve particular goals, often involving a series of planned actions or steps.

Payback

Payback period refers to the time it takes for an investment to generate enough cash flow to recover its initial cost.