Accounting Assumptions Flashcards
1
Q
Period Assumption
A
The life of the business is divided into
periods of time known as a reporting period. (to measure performance)
2
Q
Accrual Basis Assumption
A
A method of determining profit whereby profit (Revenue - Expenses incurred during a particular period.)
3
Q
Going Concern Assumption
A
The business will continue to operate and not be wound up / closed in the forseeable future.
4
Q
Entity Assumption
A
The records of the business are kept seperate from the owner and from other entities.
5
Q
Accounting Assumptions (PAGE ACRONYM)
A
P eriod Assumption
A ccrual Basis Assumption
G oing Concern Assumption
E ntity Assumption
