Chapter 4, Problem 8BTN

To determine

Concept Introduction:

Recognition and Measurement Concept – The transactions which are related to the business and can be measured in monetary terms shall be recorded in the books of accounts.

Interim Financial Statement – These are the financial statements which cover a period less than 1 year. It may be a month or a quarter or 6 months. The objective of preparing interim financial statement is to give the investors and creditors current information to help them in taking any decision about the company.

Cash and Accrual Basis – Cash basis means recording an accounting transaction when cash is received or paid whereas accrual basis means recording a transaction as and when it arises, even if the cash is not involved.

Worksheet Approach - The worksheet approach is used when the manager decides to prepare interim financial report.

Requirement – 1

To Determine: Whether the company prepares interim statements

To determine

Requirement – 2

To Determine: Cash basis or Accrual Basis

To determine

Requirement – 3

To Determine: Use of worksheet in preparing financial statements

To determine

Requirement – 4

To Determine: Use of Spreadsheet in preparing financial statements

To determine

Requirement – 5

To Determine: Completion of Annual Statements