The fiscal period assumption states that the operating life of an economic entity:
A)is generally for a period of one year.
B)can be any period management decides it to be.
C)must be an entity separately distinct from its owners.
D)can be divided into time periods over which measures of performance and financial position can be developed and applied.

Question

Quizplus · Accepted Answer

The fiscal period assumption implies that financial statements must be prepared periodically which means it can be divided into time periods over which measures of performance and financial position can be developed and applied. It doesn't restrict the life of an economic entity to only one year and doesn't necessarily require a separate entity from its owners. Hence, option D is the correct choice.

The Fiscal Period Assumption States That the Operating Life of an Economic