Explain periodicity assumption of accounting, Accounting Basics

Assignment Help:

Q. Explain Periodicity assumption of accounting?

As-per to the periodicity (time periods) assumption accountants divide an entity's life into months or years to report its economic activities. Afterwards accountants attempt to prepare accurate reports on the entity's activities for these periods. Even though these time-period reports provide useful and timely financial information for investors and creditors they may be inaccurate for some of these time periods because accountants should estimate depreciation expense and certain other adjusting entries.

Accounting reports cover comparatively short periods. These time periods are typically of equal length consequently that statement users can make valid comparisons of a company's performance from period to period. The length of the accounting period should be stated in the financial statements. For example so far the income statements in this text were for either one month or one year. Companies that publish their financial statements such like publicly held corporations in general prepare monthly statements for internal management and publish financial statements quarterly and annually for external statement users.


Related Discussions:- Explain periodicity assumption of accounting

What are the break-even levels of ebit, John is considering the best capita...

John is considering the best capital structure for his firm. Suppose there are two capital structures for him to choose from. Structure A would have 7,000 shares of stock and $160,

Determine their participation in the year''s net income, Wyatt and Truett f...

Wyatt and Truett formed a partnership investing $330,000 and $110,000 respectively. Determine their participation in the year''s net income of $420,000 under the following assumpti

International capital budgeting, International Capital Budgeting Ques...

International Capital Budgeting Question 1. How does international capital budgeting differ from domestic capital budgeting? Many firms, when assessing international proj

State about the trade discounts, State about the Trade discounts Perc...

State about the Trade discounts Percentage reduction from list price of the merchandise. These aren't recorded in the accounting records of the seller or buyer. Buyer always

Marginal and Absorption, the guinegog is a trader in portable cd-man. His b...

the guinegog is a trader in portable cd-man. His budgeted output is 5000 units per quarter. The following data was available for the year 1998: Direct labour @ $6 Direct material @

Recording, does immaterial items have to be recorded

does immaterial items have to be recorded

Why is it more difficult to account for the inventory, Why is it more diff...

Why is it more difficult to account for the inventory of a manufacturing firm than for that of a merchandising firm?

Retained earnings account, Closing entries perhaps prepared directly from t...

Closing entries perhaps prepared directly from the work sheet. The first journal entry debits all items appearing in the Income Statement credit column as well as credits Income Su

Functions of balance sheet, The basic functions of a balance sheet are: ...

The basic functions of a balance sheet are: 1. It provides the financial place of a company on any given date 2. It provides the liquidity picture of the concern. 3. It p

Account, #quthe books of deven verma could not be tallied.the accountant tr...

#quthe books of deven verma could not be tallied.the accountant transferred the difference of Rs.1270 in the suspense account on the debit side the following mistakes were found la

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd