Which of the following observations is true of the discrete view of interim reporting?
A)An interim period is viewed as an installment of an annual period.
B)Recognition and adjustment of certain income or expense items may be affected by judgments about the expected results of the entire year's operations.
C)Each interim period is considered as a basic accounting period to be evaluated as if it were an annual accounting period.
D)One interim period would not bear the entire expense that benefits more than one interim period.

Question

Quizplus · Accepted Answer

The discrete view of interim reporting considers each interim period as a basic accounting period to be evaluated individually, rather than simply as an installment of an annual period (A). While judgments about expected annual results may influence recognition and adjustment of certain income or expense items, this is true of both the discrete view and the integral view (B). The principle of expense recognition dictates that expenses should be matched with the period in which they are incurred, so it follows that one interim period would not bear the entire expense that benefits more than one period (D); however, this principle is relevant to both discrete and integral views of interim reporting.

Which of the Following Observations Is True of the Discrete