Which of the Following Statements Is Incorrect

question 100

Multiple Choice

Which of the following statements is incorrect?

• A) An adjusted trial balance shows the account balances after they have been revised to reflect the effects of end-of-period adjustments.
• B) Interim financial reports can be based on one-month or three-month accounting periods.
• C) The fiscal year is any 12 consecutive months used by a business as its annual accounting period.
• D) Property, plant, and equipment are long term assets.
• E) The cash basis of accounting is consistent with GAAP.

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Definitions:

Financial Accounting

The field of accounting that focuses on preparing financial statements for external users, such as investors, creditors, and regulatory agencies.

External Users

Individuals or entities outside a company, such as investors, creditors, regulators, and customers, who use its financial information for making decisions.

External Auditing

The examination of financial records and statements by an independent third party, to ensure accuracy and adherence to accounting standards.

Private Accountant

An accountant employed by a single firm, business, or organization to handle its internal financial matters.