A broad principle that requires identifying the activities of a business with specific time periods such as months, quarters, or years is the:
A) Time period assumption.
B) Operating cycle of a business.
C) Going-concern assumption.
D) Accrual basis of accounting.
E) Expense recognition (matching) principle.

Question

Quizplus · Accepted Answer

The time period assumption requires businesses to identify their activities with specific time periods so that financial information can be reported on a regular basis (monthly, quarterly, annually, etc.) for investors, creditors, and other stakeholders. This principle helps ensure that financial statements are accurate and comparable over time.

A Broad Principle That Requires Identifying the Activities of a Business