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.

Question

Quizplus · Accepted Answer

Extraordinary items are included in the determination of net income in the interim period in which they occur. This approach ensures that financial statements accurately reflect the period's events and their impact on the company's financial position.

When a Company Issues Interim Financial Statements, Extraordinary Items Should