Which of the following best describes the proper accounting for interim financial reports?
A) The interim period is viewed as an integral part of the annual accounting period.
B) The interim period is viewed as a distinct, independent accounting period.
C) Interim net income should be determined by using the same principles as those for the annual accounting period.
D) Net income should be computed on the cash basis except for sales, cost of goods sold, and depreciation.

Question

Quizplus · Accepted Answer

Interim financial reports should be viewed as an integral part of the annual accounting period, and therefore the principles and methods used to prepare the annual financial statements should also be applied to interim financial reports. This ensures consistency and comparability between the interim and annual financial statements.

Which of the Following Best Describes the Proper Accounting for Interim