The time period concept dictates that the reporting period or fiscal period of an entity must be for 12 months.

Question

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The time period concept does not dictate that the reporting period or fiscal period of an entity must be for 12 months. The reporting period can be any length of time, as determined by the entity's management or as required by accounting standards. However, most entities choose a fiscal period that is 12 months long for ease of comparison with previous periods and with other entities.

The Time Period Concept Dictates That the Reporting Period or Fiscal