How should seasonal revenues be reported in an interim financial statement?
A) The seasonal nature should be disclosed, and a pro forma report for the next 12-month period should supplement the interim report.
B) The seasonal nature should be disclosed but no other reports should accompany the interim report.
C) The seasonal nature should be disclosed, and a supplemental report for the 12-month period ended at the interim date should supplement the interim report.
D) The financial statements should be adjusted to reflect the assumption that no seasonal revenues could be earned.
E) Seasonal revenues have no particular reporting requirement.

Question

Quizplus · Accepted Answer

According to accounting standards, when there is a significant seasonal impact on revenues in an interim period, the financial report should disclose the seasonal nature and provide a supplemental report for the 12-month period ended at the interim date to provide a more meaningful picture of the company's financial performance. This enables stakeholders to make better-informed decisions based on the company's performance. Therefore, option C is the best choice.

How Should Seasonal Revenues Be Reported in an Interim Financial