The preparation of accounting information is based on certain fundamental principles which are named as accounting assumptions. These are, like any other assumptions, things that accountant assumes before he prepares accounting information. For example: every asset that an organization has is depreciated for future, because accounting supposes that it is going to be used in the future. In most cases, it will be but in some cases it won't, but as an accountant you must always assume or suppose that it will. There are various other assumptions, or principles that accounts make believe while preparing accounting information. Some of them, which I know of, are: * Business Entity Concept * Going Concern concept * Historical Cost concept * Accounting Period Concept * Materiality concept * Full Disclosure concept All these concepts are known as accounting assumptions, there may be few more which I am , at this moment, oblivious to.
Manish Regmi
entity assumption
Economic Entity Assumption Going Concern Assumption Monetary Unit Periodicity(Time Period) Assumption
going concern assumption
There are many accounting principles and many are very important in their own way. The top three most important principles are: Economic Accounting Principle, Monetary Unit Assumption, and Time Period Assumption.
Cost Flow Assumption
accounting assumption is nothing
entity assumption
Economic Entity Assumption Going Concern Assumption Monetary Unit Periodicity(Time Period) Assumption
accounting assumptions provide a foundation for recording the transactions and preparing the financial statements there from.
going concern assumption
Economic entity assumption is an assumption under the Generally Accepted Accounting Principles that separates the stakeholders from the business itself. The business is its own entity. Economic entity assumption is an assumption under the Generally Accepted Accounting Principles that separates the stakeholders from the business itself. The business is its own entity.
There are many accounting principles and many are very important in their own way. The top three most important principles are: Economic Accounting Principle, Monetary Unit Assumption, and Time Period Assumption.
Cost Flow Assumption
By definition the time period assumption presumes that the life of a company can be divided into time periods, such as months and years, and that useful reports can be prepared for those periods. Answer is Time period assumption
The dollar is assumed to be a finite entity.
Time Period Assumption
"The monetary unit assumption requires that companies include in the accounting records only transactions data that can be expressed in terms of money. This assumption enables accounting to quantify (measure) economic events. The monetary unit assumption is vital to applying the cost principle. This assumption prevents the inclusion of some relevant information in the accounting records. For example, the health of the owner, the quality of service, and the morale of employees are not included. The reason: Companies cannot quantify this information in terms of money. Though this information is important, only events that can be measured in money are recorded." Source: "Accounting Principles" Wiley. 8th edition. Weygant; Kieso; Kimmel.