Chapter 6, Problem 1ANFS

Which of the following is true regarding a fiscal year? Group of answer choices A. Companies can choose to end their fiscal year on any date they feel is most relevant, most likely coinciding with the natural business cycle. B. Companies must end their fiscal year on March 31, June 30, September 30 or December 31. C. Companies can select any date except a holiday to end their fiscal year. D. Companies must end their fiscal year on December 31.

The life of a business is divided into specific time periods,usually a year, to measure results of operations for eachsuch time period and to portray financial conditions at theend of each period.(a) This practice is based on the accounting assumptionthat the life of the business consists of a series of timeperiods and that it is possible to measure accuratelythe results of operations for each period. Commenton the validity and necessity of this assumption.(b) What has been the effect of this practice on accounting?What is its relation to the accrual system?What influence has it had on accounting entries andmethodology?

The balance sheet provides a snapshot of the financial condition of a company. Investors and analysts use the information given on the balance sheet and other financial statements to make several interpretations regarding the company’s financial condition and performance. Cold Goose Metal Works Inc. is a hypothetical company. Suppose it has the following balance sheet items reported at the end of its first year of operation. For the second year, some parts are still incomplete. Use the information given to complete the balance sheet. Cold Goose Metal Works Inc. Balance Sheet for Year Ending December 31 (Millions of Dollars)   Year 2 Year 1   Year 2 Year 1 Assets     Liabilities and equity     Current assets:     Current liabilities:     Cash and equivalents    $4,612 Accounts payable $0 $0 Accounts receivable 2,109 1,688 Accruals 293 0 Inventories 6,187 4,950 Notes payable 1,660 1,562 Total current assets $14,062 $11,250 Total current liabilities    $1,562 Net…

An operating cycle: a. is twelve months or less in length. b. is the average time required for a company to collect its receivables c. is used to determine current assets when the operating cycle is longer than one year. d. begins with inventory and ends with cash Most companies record revenue when they ship goods to customers not when they are delivered to customers. (Choose only one word that makes the statement incorrect)

A fiscal period is any period of time covering a complete accounting cycle. A fiscal year consists of 12 consecutive months. The accounting cycle represents the sequence of steps in the accounting process completed during the fiscal period.   Which of the following would be considered a fiscal year? (Select "Yes" for the items that are applicable and "No" for the items that do not apply) August 1, 20-- to November 30, 20--   January 1, 20-- to December 31, 20--   May 1, 20-- to April 30, 20--   July 1, 20-- to June 30, 20--

You are the chief accountant for Bengal Products Inc. Your junior accountant has prepared an income statement for the current year and prepared the following additional information by analyzing changes in the company's balance sheet accounts. "Calculation is attached in as image" Changes in the company's balance sheet accounts over the year are summarized as follows:1. Accounts receivable decreased by $85,000.2. Accrued Interest Receivable increased by $15,000.3. Inventory decreased by $280,000.4. Accounts payable related to suppliers of merchandise decreased by $240,000.5. Short-term prepayments of operating expenses decreased by $18,000.6. Accrued liabilities for operating expenses increased by $35,000.7. Liability for accrued interest payable decreased by $16,000.8. Liability for accrued income taxes payable increased by $25,000.9. As an investment, $120,000 of marketable securities were purchased during the year.10. Marketable securities with a book value of $210,000 were sold.11.…

Explain how interim financial statements areprepared in a business that closes its accountsonly at year-end.

Choose from the following list of terms and phrases to best complete the statements below. a. Fiscal year c. Accrual basis accounting e. Cash basis accounting b. Timeliness d. Annual financial statements f. Time period assumption 1. presumes that an organization’s activities can be divided into specific time periods. 2. Financial reports covering a one-year period are known as . 3. A(n) consists of any 12 consecutive months. 4. records revenues when services are provided and records expenses when incurred. 5. The value of information is often linked to its .

Which of the following is true? A. Companies can select any day except a holiday to end their fiscal year. B. Companies must end their fiscal year on March 31, June 30, September 30, or December 31. . The U.S. government will assign each company a fiscal year. D. Companies can choose to end their fiscal year on any date, usually during a low point in the business cycle .