Commercial Applications
The Accounting Period Concept requires that financial statements be prepared at regular intervals, even if the business is expected to close soon.
- True
- False
GAAP
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Answer
False
Reason — The Accounting Period Concept rests on the Going Concern assumption that the business will continue indefinitely. The entire life of the firm is divided into time intervals because the firm is expected to operate for a long time. If a business is expected to close soon, the going concern assumption no longer holds and the basis for the accounting period concept is undermined.
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