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Accounting Period Concept

Time period covered by financial statements is known as

accounting period.

Time period assumption means business activities can be

divided into specific period such as a month, a quarter

and a year in order to enables comparison of business

performance over time.

Example:

The company has established at 1 January 2013. The

trade closes the business account every 12 months at 31

December every year. Explain the concept involved.

Conclusion:

That is normal condition when the trade follow the

Accounting period where the financial statements will be

held every 12 months.

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