Answer:
The time period assumption presumes that an organization's activities can be divided into specific time periods for periodic reporting.
Step-by-step explanation:
Known as periodic reports, interim reports or interim statements, these updates provide important company information between annual reporting periods. To help protect investors and keep the public informed, regulations typically require public companies to submit company performance reports more than once a year.
Therefore, the importance of the time period principle is to inform any readers about the time period for which the financial statements have been prepared. The general concept of the time period principle assumes that all businesses can divide their financial activities into artificial time periods.