Business task is liquid. Revenue and price generating activities are in consistent activity. Just because it is time to rotate a web page on a calendar does not expect that all business activity ceases. But, for purposes of measuring performance, it is important to attract a line in the sand of time. A
An accounting assumption that purports to divide a consistent company process right into measurement intervals, such as months, quarters, and years
" data-gt-translate-attributes="<"attribute":"data-cmtooltip", "format":"html">">periodicity assumption is made that company activity can be separated into measurement intervals, such as months, quarters, and years.
You are watching: The periodicity assumption states that the economic life of a business can be divided into
Accounting Implications
Accounting must divide the constant business process, and also create periodic reports. An yearly reporting duration might follow the calendar year by running from January 1 through December 31. Annual periods are generally better divided right into quarterly durations containing activity for 3 months.


Define the periodicity presumption, and understand its prestige in earnings measurement. See more: Train Of Thought ( 6 Letter Word For Train Of Thought, Train Of Thought Crossword Clue |
What is a fiscal year versus a calendar year? |
Understand the nature and also conceptual importance of the “accrual” basis of bookkeeping. |
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Further Reresources
Illustrative EntriesExamples of journal entries for plenty of sample transactions
Account TypesTypical financial statement accounts through debit/crmodify rules and also disclosure conventions