A business will divide the life of its business into specific accounting periods because
A) a transaction can only affect one period of time.
B) the number of transactions will be more evenly divided between periods.
C) adjustments to the enterprise's accounts can only be made in the time period when the business terminates its operations.
D) it will provide useful information to the business's users.

Question

Quizplus · Accepted Answer

Dividing the life of a business into specific accounting periods provides useful information to the business's users by allowing them to analyze the financial performance of the business over time. It also allows for the preparation of regular financial statements, such as income statements and balance sheets, which are useful for decision-making and planning purposes. Options A, B, and C are not accurate reasons for why a business divides its life into specific accounting periods.

A Business Will Divide the Life of Its Business into Specific