The assumption that enables us to prepare periodic statements between the time that a business commences operations and the time it goes out of business is:
A)time period.
B)business entity.
C)historical cost.
D)transaction.
E)None of the answers are correct.

Question

Quizplus · Accepted Answer

The assumption of time period allows us to divide the operating life of a business into smaller time periods such as months, quarters, or years. This enables the preparation of periodic financial statements, such as income statements and balance sheets, which provide information about the business's performance and financial position during that period. This assumption assumes that the economic life of a business can be divided into shorter periods so that financial statements can be prepared periodically.

The Assumption That Enables Us to Prepare Periodic Statements Between