Financial Reporting Paper 2

1

An inventory loss from a market price decline occurred in the first quarter. The loss was not expected to be restored in the fiscal year. However, in the third quarter the inventory had a market price recovery that exceeded the market decline that occurred in the first quarter. For interim financial reporting, the dollar amount of net inventory should






2

For external reporting purposes, it is appropriate to use estimated gross profit rates to determine the cost of goods sold for Interim financial reporting Year-end financial reporting






3

For interim financial reporting, the computation of a company’s second quarter provision for income taxes uses an effective tax rate expected to be applicable for the full fiscal year. The effective tax rate should reflect anticipated
Foreign tax rates
Available tax planning alternatives






4

For interim financial reporting, a company’s income tax provision for the second quarter of year 1 should be determined using the






5

ASC Topic 270, Interim Reporting, states that interim financial reporting should be viewed primarily in which of the following ways?






6

Conceptually, interim financial statements can be described as emphasizing






7

Wilson Corp. experienced a $50,000 decline in the market value of its inventory in the first quarter of its fiscal year. Wilson had expected this decline to reverse in the third quarter, and in fact, the third quarter recovery exceeded the previous decline by $10,000. Wilson’s inventory did not experience any other declines in market value during the fiscal year. What amounts of loss and/or gain should Wilson report in its interim financial statements for the first and third quarters?
First quarter. . . . . Third quarter






8

Which of the following statements is true regarding interim reporting for companies that prepare their financial statements in accordance with IFRS?






9

Noble Corporation prepares its financial statements in accordance with IFRS. If Noble prepares interim financial statements, which statements are required?
I. Statement of Financial Position
II. Statement of Income
III. Statement of Comprehensive Income
IV. Statement of Cash Flows
V. Statement of Changes in Equity






10

Which of the following describes IFRS’s requirements regarding interim financial statements?






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