Accounting Assumption Definitions Flashcards
1
Q
Period
A
The ongoing life of the business is broken into regular intervals of equal time, so that financial reports can be prepared.
2
Q
Going Concern
A
The business will continue to operate in the future without any expectation that it will close in the near future.
3
Q
Accural
A
Under this assumption, revenue is recognised when it is earned, and expenses are recognised when they are incurred, in order to calculate an accurate Net Profit for the period.
4
Q
Entity
A
The business has it’s own financial status which is spereate from it’s owners or other businesses and reports or records should be kept on that basis.
