Question

Franco Corporation began operations on August 1, 20Y5. The company adopts a fiscal year that begins September 1. When does the company's first fiscal year occur?

1) August 1, 20Y5 to August 31, 20Y6
2) September 1, 20Y5 to August 31, 20Y6
3) September 1, 20Y5 to September 30, 20Y6
4) August 1, 20Y5 to September 30, 20Y6

Answer 1

Franco Corporation's first fiscal year runs from September 1, 20Y5 to August 31, 20Y6, following the standard definition of a fiscal year.

Step-by-step explanation:

The first fiscal year for Franco Corporation, which began operations on August 1, 20Y5 and adopts a fiscal year that begins on September 1, would not include the time between the start of operations and the beginning of the first full fiscal year. Since a fiscal year typically covers a full 12-month period, Franco Corporation's first fiscal year would be the 12 months following the start of its fiscal year on September 1. Therefore, the first fiscal year for Franco Corporation would be from September 1, 20Y5 to August 31, 20Y6, aligning with the standard definition of a fiscal year.

The company's first fiscal year occurs from September 1, 20Y5 to August 31, 20Y6. This is because the company adopts a fiscal year that begins on September 1. So, the fiscal year starts on September 1, 20Y5, and ends on August 31, 20Y6.