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Free Dumps AICPA Certification FAR : CPA Financial Accounting and Reporting

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Question 7: In general, an enterprise preparing interim financial statements should:
A. Defer recognition of seasonal revenue.
B. Disregard permanent decreases in the market value of its inventory.
C. Allocate revenues and expenses evenly over the quarters, regardless of when they actually
occurred.
D. Use the same accounting principles followed in preparing its latest annual financial statements.
Correct Answer: D
Explanation:
Choice "d" is correct. Generally accepted accounting principles that were used in the most recent
annual
report of an enterprise should be applied to interim financial statements of the current year, unless a
change in accounting principle is adopted in the current year.
Choices "a", "b", and "c" are incorrect, per above.
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