The time period assumption assumes that an organization's activities can be divided into specific time periods.

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The time period assumption is a fundamental accounting principle that assumes the organization's activities can be divided into specific time periods, such as months, quarters or years. By dividing the financial information into time periods, management can gain insight into the organization's profitability, cash flows, and financial health over time. This assumption helps in preparing financial statements such as income statements, balance sheets, and cash flow statements for specific time periods.

The Time Period Assumption Assumes That an Organization's Activities Can