When a Company Issues Interim Financial Statements, Extraordinary Items Should

question 19

Multiple Choice

When a company issues interim financial statements, extraordinary items should be:

• A) allocated to the current and remaining interim periods of the current year on a pro rata basis.
• B) deferred and included only in the annual income statement.
• C) included in the determination of net income in the interim period in which they occur.
• D) charged or credited directly to retained earnings so that comparisons of interim results of operations will not be distorted.

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Definitions:

Top-Management Commitment

The extent to which an organization's highest-level leaders are dedicated to and actively support the implementation of policies, practices, and goals.

Productivity Improvement

The process of increasing the efficiency and effectiveness of operations, resulting in higher output with the same or fewer resources.

Flow Charts

Diagrams that depict the steps of a process or system, showing how each element connects.

Management By Objectives (MBO)

A management strategy that involves setting specific, measurable goals with each employee and then periodically reviewing the progress made.