A Difficulty Can Arise in Preparing an Interim Report Because

question 54

Multiple Choice

A difficulty can arise in preparing an interim report because

• A)there is insufficient time for the staff to prepare the report
• B)it is difficult to determine meaningful operating results for an interval of less than a year
• C)a fiscal year involves twelve months and the annual report must report monthly totals
• D)quarterly reporting is more valuable than an interim report

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Definitions:

Indirect Method

A method of preparing a statement of cash flows in which net income is adjusted for items that do not affect cash, to determine net cash provided by operating activities.

Accounts Receivable

Amounts owed to a business by its customers for goods or services that have been delivered or used but not yet paid for.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenues.

Statement of Cash Flows

A financial report that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.