True or False: The Periodicity Assumption states that firms can evaluate their financial position only at the end of their fiscal year.

The Periodicity Assumption is a fundamental principle in accounting that allows businesses to divide their operations into artificial time periods, such as months, quarters, or years, for the purpose of reporting financial performance and position. This means that firms can evaluate their financial situation not only at the end of their fiscal year but at any designated reporting interval, such as monthly or quarterly.

This flexibility enables businesses to provide timely information to stakeholders, monitor progress, and make informed decisions throughout the year. Thus, the statement suggesting that firms can only evaluate their financial position at the end of their fiscal year overlooks the essential nature of the Periodicity Assumption, which allows for more frequent assessments of financial health. Therefore, the correct response is that the statement is false.