Running head: PERIODICITY ASSUMPTIONPeriodicity AssumptionNameInstitution1PERIODICITY ASSUMPTION2Periodicity AssumptionIn business activities, business is a continuous flow of activities, decisions, and resultsthat never halts unless halted by the stakeholders. When providing reports of business, it isimpossible to capture the entire flow without dividing it into definite periods which allow aseemingly discrete look into the activities. Periodicity assumption, therefore, is the division ofthe business activities into definite time periods for the sake of reporting. This periodicityassumption allows the business analysts or reporters to divide the business into periods such as ayear, quarters, and months. These measurable intervals allow performance to be measured andassess the progress of the business as time goes by.Periodicity assumption is adopted for several reasons. First, reporting a business activityneeds to be a continuous process so that shareholders can make valuable decisions. For instance,if a company enters a contract to supply the army with technology for five years, theshareholders cannot wait for the five years to assess the progress of the ...
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