The time period assumption states that:

(a) companies must wait until the calendar year is completed to prepare financial statements.
(b) companies use the fiscal year to report financial information.
(c) the economic life of a business can be divided into artificial time periods.
(d) companies record information in the time period in which the events occur.

Respuesta :

Answer:

(d) companies record information in the time period in which the events occur.

Explanation:

In accrual accounting information about transactions are recorded in the time period when the transaction occured. This helps business asses how well they are doing within a time period for example quarterly, monthly, yearly.

Let's say a revenue was earned this year or $40,000, it must be recorded as a transaction that occurred this year. It cannot be recorded against next year's record as that is not the period in which it occured.