In order to prepare financial information for interested parties Hobart Company divides the economic activity of the firm into three-month segments and prepares financial statements at the end of each segment. Which accounting assumption is Chambers applying?
A) Accounting period
B) Materiality
C) Accounting entity
D) Going concern

Question

Quizplus · Accepted Answer

The accounting assumption being applied by Hobart Company is the accounting period assumption, which divides the economic activity of the firm into three-month segments and prepares financial statements at the end of each segment. This assumption recognizes that the economic activity of a business can be divided into artificial time periods for reporting purposes.

In Order to Prepare Financial Information for Interested Parties Hobart