Garrison Company prepares quarterly reports, which it distributes to all stockholders and other entities that rely on its accounting information. Which of the following is the best term for the key assumption in financial reporting that Garrison is following?
A) Monetary unit assumption
B) Going concern assumption
C) Economic entity assumption
D) Periodicity assumption.

Question

Quizplus · Accepted Answer

The periodicity assumption is the key assumption that allows a company to divide its economic activities into artificial time periods, such as quarters, for reporting purposes.

Garrison Company Prepares Quarterly Reports, Which It Distributes to All