Wednesday, June 10, 2015

PERIODICITY CONCEPT

Although a business concern will run for an unlimited period of time, the owner of the business and other related individuals want to know the performance and financial position of the business after certain interval. For this reason, we have to set up a specific period of time for which the profit or loss of the business would be calculated. This specific period is known as accounting period. In the interest of uniformity and comparability this date is usually decided at an equal interval. Accounting period may be one year, six months, three months, one month, a week or a day. So, financial statements of an enterprise are prepared and disclosed periodically showing performance of this period. 

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