Accounting Periods and Public-Company SEC Reports

All flashcards

What is an accounting period?

It is the span of time covered by financial statements. Common periods include a month, a quarter, and a year.

What does the time period principle emphasize?

It emphasizes reporting financial activity across distinct periods and providing information promptly enough to be useful for decisions.

How does a fiscal year differ from a calendar year?

A calendar year runs from January 1 through December 31. A fiscal year is a company’s chosen 12-month reporting period and may use different start and end dates.

What are common contents of an annual report?

Company information, financial statements and notes, required disclosures, MD&A, a CEO letter to shareholders, and an auditor’s report.

How do Forms 10-K, 10-Q, and 8-K differ in purpose?

Form 10-K is the annual report filing, Form 10-Q is the quarterly report, and Form 8-K reports certain significant events between regular reports.

Quiz questions

1. Under accrual accounting, when are revenues and expenses generally recorded?Answer: When revenues are earned and expenses are incurred.
2. Why might a seasonal company choose a fiscal year that differs from the calendar year?Answer: To align its reporting period more closely with its business cycle.
3. Which report components are commonly included in a public company’s Form 10-Q?Answer: Financial statements, accounting disclosures, internal-control statements, and MD&A.
4. Which filing is a publicly traded company’s quarterly report?Answer: Form 10-Q.
5. Why are cutoff dates important when recording transactions under accrual accounting?Answer: They help determine which reporting period includes each transaction.