Final answer:
Completeness in accounting ensures all financial transactions are recorded when they occur. This includes recording revenue when earned and expenses when incurred, adhering to the accrual basis of accounting.
Step-by-step explanation:
Completeness is an aspect of completeness. It refers to accounting for revenue, expense, and other transactions in the proper period. In accounting, this concept is critical because it ensures that all financial transactions are recorded in the time frame in which they occur. This is part of the accrual basis of accounting, which stands in contrast to the cash basis. The accrual basis recognizes revenues when they are earned and expenses when they are incurred, regardless of when the cash is actually exchanged.
An example of completeness in practice would be recording sales in the month the product was delivered or service was provided, not necessarily when the payment was received. Similarly, expenses are recorded when they are incurred, not when they are paid. This provides a more accurate financial picture of the company's performance during a particular period and is essential for making informed business decisions.