Generally accepted accounting principles do not apply when a firm does not appear to be a

going concern. In this case the liquidation values are the appropriate figures. 1- 7. With the time
period assumption, inaccuracies of accounting for the entity, short of its complete life span, are
accepted. The assumption is made that the entity can be accounted for reasonably accurately for
a particular period of time. In other words, the decision is made to accept some inaccuracy
because of incomplete information about the future in exchange for more timely reporting. The
statements are considered to be meaningful because material inaccuracies are not acceptable.