Multiple choice

During the life time of an entity, accountants prepare financial statements at arbitrary points of time as per

  1. prudence

  2. consistency

  3. periodicity

  4. matching

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Periodicity concept divides entity life into artificial time periods (accounting year) for reporting. Financial statements prepared at these arbitrary intervals - quarterly, half-yearly, annually. Prudence, consistency, matching are separate accounting principles. Periodicity answers 'when' to report - at regular intervals rather than waiting for entity's liquidation.