Introduction:
Financial statements: The financial statements of a company are prepared at the end of an accounting year to calculate the total liabilities, total assets, net profit or loss, and increase or decrease in cash during the year. The financial statements are used by various external and internal parties.
To choose: The correct term to complete the given sentences.
Explanation of Solution
The correct term to complete the given sentences are as follows:
1.
Time period assumption presumes that the activities of an organization can be divided into specific time periods. Therefore, the correct option is “f”.
2.
Annual financial statements are financial reports that cover a period of one year. Therefore, the correct option is “d”.
3.
A fiscal period consists of any twelve consecutive months. Therefore, the correct option is “a”.
4.
The accrual basis of accounting records the expenses when incurred and revenues when earned. Therefore, the correct option is “c”.
5.
The value of information is often linked to its timeliness. Therefore, the correct option is “b”.
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Chapter 3 Solutions
FINANCIAL & MANAGERIAL ACCOUNTING (ACCES
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