Timing Issues - Timing Issues Most businesses need...

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Timing Issues Most businesses need immediate feedback about how well they are doing. For example, management usually wants monthly reports on financial results, most large corporations are required to present quarterly and annual financial statements to stockholders, and the Internal Revenue Service requires all businesses to file annual tax returns. Accounting divides the economic life of a business into artificial time periods. As indicated in Chapter 2 , this is the time period assumption . Accounting time periods are generally a month, a quarter, or a year. Helpful Hint An accounting time period that is one year long is called a fiscal year . Many business transactions affect more than one of these arbitrary time periods. For example, a new building purchased by Citigroup or a new airplane purchased by Delta Air Lines will be used for many years. It doesn't make sense to expense the full cost of the building or the airplane at the time of purchase because each will be used for many subsequent periods. Instead, we
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Timing Issues - Timing Issues Most businesses need...

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