Why the entire life of business enterprise is divided into time intervals
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Answer: The time period assumption is also known as accounting time period concept, it says that life of a business can be divided into different time intervals mainly quarter, 6 months or a year.
Explanation: The life of a business is divided into time intervals because:-
It helps the organization to analyze the things which it has done in the past and take actions according to that in future.
Activities of the company are divide their economic activities into short term periods for which financial statement is prepared by the company to meet the needs of its users.
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