Which of the Following Statements About Interim Reporting Is False

question 19

Multiple Choice

Which of the following statements about interim reporting is false?

• A)​If a company reports year-to-date financial information for the current year, it also must report the last twelve month-to-date information.
• B)​Under some circumstances, a company can restate the financial information of an earlier current-year quarter.
• C)​The gross profit method may be used for interim periods when taking a physical inventory would be too costly.
• D)​A company should allocate a portion of its estimated year-end inventory adjustment to each interim period.

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Definitions:

Uncollectible Accounts

Accounts receivable that a company does not expect to collect and thus writes off as a loss.

Direct Write-off Method

An accounting practice where uncollectable debts are written off against income at the time they are deemed non-collectable.

Allowance Method

An accounting technique that estimates uncollectible accounts receivable to record bad debts expense, reflecting more accurate accounts.

Allowance for Doubtful Accounts

A contra-asset account that represents the estimated amount of accounts receivable which may not be collected.