Which of the Following Is NOT True Regarding Standards for Interim

question 9

Multiple Choice

Which of the following is NOT true regarding standards for interim reporting?

• A) Declines in inventory value should be deferred to future interim periods.
• B) Use of the gross margin method for computing cost of goods sold must be disclosed.
• C) Costs and expenses not directly associated with interim revenue must be allocated to interim periods on a reasonable basis.
• D) Gains and losses that arise in an interim period should be recognized in the interim period in which they arise if they would not normally be deferred at year-end.

---

Definitions:

Budget Surplus

Excess funding that occurs when government spends less than the amount of funds raised through taxes and fees.

Government of a Country

The organization that is the governing authority of a political unit, responsible for creating and enforcing laws, managing public resources and services, and protecting the rights of its citizens.

Fiscal Policy

Government policies regarding taxation and spending that influence economic conditions.

Lower Taxes

The reduction of tax rates or tax burdens to encourage economic activities or provide relief to taxpayers.