A company reports financial results each year.Which underlying assumption is illustrated by this example?
A)economic entity concept
B)going concern concept
C)monetary unit assumption
D)periodicity assumption

Question

Quizplus · Accepted Answer

The periodicity assumption (also known as time period assumption) assumes that the economic activity can be divided into regular time periods or accounting periods, such as fiscal years or quarters. This assumption allows companies to report their financial results at the end of each period, giving stakeholders timely and useful information for decision making.

A Company Reports Financial Results Each Year