Why Is the Time Period Assumption Required

question 156

Multiple Choice

Why is the time period assumption required?

• A)Inflation exists.
• B)External users of financial statements want statements that accurately reflect net income or earnings for a specific time period.
• C)The dollar is the monetary unit in the United States.
• D)The federal government requires it.

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Definitions:

Bargaining

A negotiation process between two or more parties aimed at reaching a mutually acceptable agreement.

Obligation

A duty or commitment one is bound to by law, promise, or moral responsibility.

Social Loafing

A pattern in which people working together on a task generate less total effort than they would have if they had each worked alone.

Vigorously

Describes an action performed with force, energy, or intensity.