Choose from the following list of terms/phrases to best complete the statements below, a. Fiscal year b. Timeliness c. Calendar year STUDY e. Annual financial statements f. Interim statements g. Natural business year h. Time period assumption i.
To complete the statements below, let's analyze the context of each statement and match them with the appropriate term/phrase from the provided list:
1. The assumption that accountants can divide the life of a company into artificial time periods:
The correct term to complete this statement is "h. Time period assumption." The time period assumption assumes that accountants can divide the life of a company into specific and arbitrary time periods, such as months, quarters, or years.
2. Financial statements that are prepared every twelve months:
The appropriate term to complete this statement is "e. Annual financial statements." Annual financial statements are prepared once per year and provide a comprehensive overview of a company's financial performance for the entire year.
3. Financial statements that cover a shorter time frame, such as a month or a quarter:
The right term to complete this statement is "f. Interim statements." Interim statements are prepared for periods shorter than a fiscal or calendar year. They provide information on a company's financial performance during a specific time frame within a larger accounting period.
4. A company's financial reporting period that aligns with the natural operating cycle of its industry:
The term to complete this statement is "g. Natural business year." A natural business year is a fiscal year that aligns with the operating cycle of a specific business or industry. For example, retail companies might align their fiscal year to end shortly after the holiday season.
5. The twelve-month period used for tax and financial reporting purposes:
The appropriate term to complete this statement is "a. Fiscal year." A fiscal year is a 12-month period that a company or organization uses for financial reporting and accounting purposes, which may not necessarily align with the calendar year.
6. The period starting from January 1 and ending on December 31 of a given year:
The correct term to complete this statement is "c. Calendar year." A calendar year is a period of 12 months that starts on January 1 and ends on December 31 of a specific year.
Please note that these explanations are provided to help you understand the concepts behind each term/phrase, and give you the tools to find the most suitable completion for each statement.