Assumptions Flashcards
1
Q
What is the Entity Assumption?
A
The business is separate from the owner and other entities, and records should be kept on this basis.
2
Q
What is the Going Concern Assumption?
A
The existing entity will continue to operate in the future, and its records are kept on this basis.
3
Q
What is the Period Assumption?
A
Reports are prepared for a particular period of time, such as a month or year, in order to obtain a comparability of results.
4
Q
What is the Accrual Basis Assumption?
A
Profit is calculated as revenue earned in the period less expenses incurred in the same period.
