What is the goal of the ?nancial reports

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Reference no: EM133433703

Question: While the accounts may be different and there may be additional calculation, the basic cycle is the same across most industries. I say most because there is at least one deviation that is easy to discuss. Long term construction companies that have an operating cycle which lasts more than a year, needs to make adjustments based in part on the percentage of completion in order to create annual ?nancial statements. In other industries we do not need to make these adjustments as the operating cycle is usually less than a year. The operating cycle starts when we acquire raw materials and ends when we collect ?nal payments from customers. An accounting cycle is set at one year so that we can compare various companies without worrying about when there "busy" season is. While there may be a variety of accounts and adjustments, the cycle stays the same. Why would we require that the cycle be the same? according to the text, what is the goal of the ?nancial reports?

Reference no: EM133433703

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