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When accounting was developed in the 14th and 15th centuries, some businesses had very short lives. For instance, a business might have been created for a ship to sail from Europe to North America and return with furs and other goods. After the goods were delivered and profits were distributed among those who financed the shipment, the business ceased to exist. In more recent centuries, businesses began to experience longer lives.
Identify the accounting concept that is needed when accounting for businesses with long lives. Explain what this concept means and why it is necessary for modern-day accounting.
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