Weygandt, Accounting Principles, 12e Chapter 3.1

3-1.  

(a)  

How does the time period assumption affect an accountant's analysis of business transactions?

(b)  

Explain the terms fiscal year, calendar year, and interim periods.

1.       (a)    Under the time period assumption, an accountant is required to determine the relevance of each business transaction to specific accounting periods.

          (b)    An accounting time period of one year in length is referred to as a fiscal year. A fiscal year that extends from January 1 to December 31 is referred to as a calendar year. Accounting periods of less than one year are called interim periods.