The periodicity assumption is the basis for which of the following?
A) keeping the company's transactions separate from the owners' transactions.
B) the cut-off of expense recognition only.
C) the cut-off of revenue recognition only.
D) dividing the activities of a business into a series of time periods for accounting and reporting purposes.

Question

Quizplus · Accepted Answer

The periodicity assumption states that the activities of a business should be divided into a series of time periods (usually a year) for accounting and reporting purposes. This allows for the timely recognition of revenues and expenses during the relevant period, and enables financial statements to be prepared at regular intervals. The periodicity assumption does not relate to separating a company's transactions from the owners' transactions or the cut-off of expense or revenue recognition.

The Periodicity Assumption Is the Basis for Which of the Following