The assumption that for reporting purposes the life of a business is divided up into a series of time periods of equal length is known as the:
A) accounting period assumption.
B) entity assumption.
C) realisation assumption.
D) matching assumption.

Question

Quizplus · Accepted Answer

The accounting period assumption assumes that the life of a business can be divided into a series of time periods of equal length, such as monthly, quarterly, or annually, for the purpose of financial reporting. This allows for the preparation of regular financial statements that provide useful information for decision-making.

The Assumption That for Reporting Purposes the Life of a Business