In Considering Interim Financial Reporting, How Did the Accounting Principles

question 38

Multiple Choice

In considering interim financial reporting, how did the Accounting Principles Board conclude that such reporting should be viewed?

• A) As a "special" type of reporting that need not follow generally accepted accounting principles.
• B) As useful only if activity is evenly spread throughout the year so that estimates are unnecessary.
• C) As reporting for a basic accounting period.
• D) As reporting for an integral part of an annual period.

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Definitions:

Operating Lease

A contract that allows for the use of an asset but does not convey rights of ownership of the asset.

After-Tax Cost

The actual cost to a company or individual after considering the effects of taxes, often used in evaluating the cost of financing options.

Leasing Analysis

It is the examination of the financial aspects of leasing to determine whether leasing is a more viable option than purchasing.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in alignment with the firm's goal of shareholder value maximization.