Which of the following is NOT true regarding standards for interim reporting?
A) Declines in inventory value should be deferred to future interim periods.
B) Use of the gross margin method for computing cost of goods sold must be disclosed.
C) Costs and expenses not directly associated with interim revenue must be allocated to interim periods on a reasonable basis.
D) Gains and losses that arise in an interim period should be recognized in the interim period in which they arise if they would not normally be deferred at year-end.

Question

Quizplus · Accepted Answer

This statement is not true because declines in inventory value should be recognized in the period in which they occur, regardless of whether it is an interim or year-end reporting period. In fact, it is generally required to adjust the inventory value to its lower of cost or net realizable value in the period in which the decline occurs.

Which of the Following Is NOT True Regarding Standards for Interim