Which of the Following Statements Is Incorrect

question 183

Multiple Choice

Which of the following statements is incorrect?

• A) An income statement reports revenues earned less expenses incurred.
• B) An unadjusted trial balance shows the account balances after they have been revised to reflect the effects of end-of-period adjustments.
• C) Interim financial reports can be based on one-month or three-month accounting periods.
• D) The fiscal year is any 12 consecutive months (or 52 weeks) used by a business as its annual accounting period.
• E) Property, plant, and equipment are long-term tangible assets.

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Definitions:

Average Inventory

The mean value of inventory held by a business over a specific period of time, used to evaluate the investment in inventory against sales performance.

Ending Inventory

The complete valuation of items that are up for sale at the end of a financial accounting period.

Beginning Inventory

The value of all the inventory held by a company at the start of an accounting period, before any purchases or sales are made.

Inventory Turnover

A measure of how many times a company's inventory is sold and replaced over a specific period, indicating efficiency in managing stock.