During the lifetime of an entity accounting produce financial statements in accordance with, which basic accounting concept?

Conservation

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Matching

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Accounting period

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

None of these

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is A Accounting period
Accounting period refers to the span of time at the end of which the financial statements of an enterprise are prepared, to know whether it has earned profits or incurred losses during that period and what exactly is the position of its assets and liabilities at the end of that period.
Such information is required by different users at regular interval for various purposes, as no firm can wait for long to know its financial results as various decisions are to be taken at regular intervals on the basis of such information.
The Companies Act 1956 and the Income Tax Act require that the income statements should be prepared annually.

Suggest Corrections

Similar questions

Q. During the life-time of an entity, accountants prepare financial statements at a point of time in accordance with which basic accounting principles?

Which concept is the reason behind accounting the cost of a small calculator as an expense and not as an asset in financial statements of a business entity?

Q. The valuation of a promise to receive cash in the future at present value on the financial statements of a business entity is valid by virtue of which accounting postulate or principle?

Q. According to Accounting Standard-6 which of the following is not required to be disclosed in the financial statement?

Q. Match List-I with List-II and select the correct answer using the codes given the lists.

List-I(Accounting concept)	List-II(Principle involved)
I. Consistency	(a) Losses are anticipated and accounted for in advance but profits are not accounted for until realised
II. Comparability	(b) All the relevant financial information should be summarised and presented in the accounting statements
III. Conservatism	(c) According procedures in an entity should be followed uniformly from period to period
IV. Disclosure	(d) Accounting statement of different periods of an entity and those of different entities of a period should be based on the same accounting principles and procedures
	(e) Personal Judgement of accountants should not influence accounting measurements

Join BYJU'S Learning Program