The time period assumption:
A) Presumes that the life of a company can be divided into time periods, such as months and years, and that useful reports can be prepared for those periods.
B) Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.
C) Means that we can express transactions and events in monetary, or money, units.
D) Means that a business is accounted for separately from other business entities, including its owner.
E) Prescribes that a company record the expenses it incurred to generate the revenue reported.

Question

Quizplus · Accepted Answer

The time period assumption assumes that the life of a company can be divided into time periods, such as months and years, and that useful reports can be prepared for those periods. This allows for the preparation of financial statements that provide meaningful information for decision-making.

The Time Period Assumption