Question

When preparing interim financial statements, an enterprise should: I. Use the same accounting principles followed in preparing its latest annual financial statements. II. Allocate expenses among all interim periods benefited, if the expenses are expected to benefit not only the period of occurrence but also additional period(s) in the same fiscal year. III. Allocate revenues and expenses evenly over the quarters, regardless of when they actually occurred.

Answer 1

Answer: 1. Use the same accounting principles followed in preparing its latest annual financial statements.

2) Allocate expenses among all interim periods benefited, if the expenses are expected to benefit not only the period of occurrence but also additional period(s) in the same fiscal year.

Explanation:

The Interim financial statements simply means financial statements which cover a period that isn't more than a year.

The interim financial statements are used to show the information with regards to how the issuing entity is performing.

When preparing the interim financial statements, it should be noted that an enterprise should:

• Use the same accounting principles followed in preparing its latest annual financial statements.

• Allocate expenses among all interim periods benefited, if the expenses are expected to benefit not only the period of occurrence but also additional period(s) in the same fiscal year.

Therefore, option I and II are correct.