Proration approach has no effect on year-end financial statements.

Name: Proration approach has no effect on year-end financial statements.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Proration approach is used to allocate expenses or revenues between two or more accounting periods. This approach only affects the interim financial statements and does not have any impact on the year-end financial statements because all the expenses and revenues are fully allocated by the end of the year.

Proration Approach Has No Effect on Year-End Financial Statements