Access Millions of academic & study documents

Periodicity

Content type
User Generated
Subject
Accounting
Type
Homework
Showing Page:
1/3
Periodicity assumption
Periodicity Assumption
Student’s Name
Students Affiliation

Sign up to view the full document!

lock_open Sign Up
Showing Page:
2/3
Periodicity assumption
Periodicity assumption.
Periodicity assumption is the accounting guidelines that gives one a room to divide up business
in to periods.
These divisions are after a given period of time such as after one month, after two months, one
year and so on. These divisions help in determining the progress of the firm and so better plan
of the future. One of the good examples is a case at which a company gives report of its
proceeding after a given period of time. For example; if we have a company like Company A
which gives its report after every six months it is clear that the company has two reports every
year.
Another case where periodicity assumption is being applied is during calculating the amount of
interest payable if an insurance company gives credit to its customers at a given rate and a
number of instalment within a year. These instalments will be divided with the number of
months a year has so as to get after how many months will one be paying the interest and
which percentage of the rate will one pay at that given time. If there are many instalment ones
tend to pay less amount of money each time than when there few instalments. This principal of
dividing time within a given period can also be termed as periodicity assumption.
Most of the businesses uses this assumption so as to get a quick progress on their businesses. In
case of a lose, the management take actions to save guide the business from collapsing which
in return helps in boosting the income of a firm.
Another case where the assumption is being used is on determining the population of a country
at a given period of time. Most of the countries does their census after a period of like ten
years. This helps in the distribution of human resources and other services to the citizens which
lead to development of the country.

Sign up to view the full document!

lock_open Sign Up
Showing Page:
3/3

Sign up to view the full document!

lock_open Sign Up
Unformatted Attachment Preview
Periodicity assumption Periodicity Assumption Student’s Name Students Affiliation Periodicity assumption Periodicity assumption. Periodicity assumption is the accounting guidelines that gives one a room to divide up business in to periods. These divisions are after a given period of time such as after one month, after two months, one year and so on. These divisions help in determining the progress of the firm and so better plan of the future. One of the good examples is a case at which a company gives report of its proceeding after a given period of time. For example; if we have a company like Company A which gives its report after every six months it is clear that the company has two reports every year. Another case where periodicity assumption is being applied is during calculating the amount of interest payable if an insurance company gives credit to its customers at a given rat ...
Purchase document to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.
Studypool
4.7
Indeed
4.5
Sitejabber
4.4

Similar Documents