Final accounts must be prepared on a periodic basis rather than waiting till the business is termina...........

Principles of Accounting & Financial Management Concepts of Accounting

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Final accounts must be prepared on a periodic basis rather than waiting till the business is terminated:

Money measurement concept

Cost concept

dual aspect concept

Accounting Period Concept

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Explanation:

Accounting period concept is based on the theory that all accounting transactions of a business should be divided into equal time periods, which are referred to as accounting periods.

The purpose of such a time period is that financial statements can be prepared and presented to the investors and also help in comparing performance of the business with each time period. By preparing financial statements within a particular time period, a company is able to determine the profit and loss that occurred during the period for the business. The lack of a proper accounting period will result in variation of results and makes it difficult to determine the financial position of the company at that time. Generally an accounting period is of 12 months (1 year). While the time period is fixed, the month can vary from company to company.