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Accountants make four assumptions in the preparation of financial statements
According to the Framework of IAS/IFRS, the underlying assumptions for the preparation of financial statements are: Accrual basis The financial statements are prepared under the accrual basis. According to accrual basis of accounting, the effects of transactions and other events are recognized when they occur and not when the cash is received or paid. In other words, the transactions are recorded in the books of accounts when they occur and not when the cash is received or paid. It is opposite to cash basis of accounting. Going concern basis The financial statements are prepared under the going concern basis. Under going concern basis, it is assumed that the enterprise will continue in operation for the foreseeable future, and the enterprise has neither the intention nor the need to liquidate or curtail materially the scale of its operations. See also[edit | edit source]
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1.What is the only underlying assumption mentioned in the Conceptual Framework forFinancial Reporting?a.Going Concernb.Accounting entityc.Time Periodd.Monetary unit 2.Which basic assumption may not be followed when an entity in bankruptcy reportsfinancial reports? Get answer to your question and much more 3.The financial statements that are prepared for the business are separate and distinctfrom the financial statements of the owners Get answer to your question and much more 4.The economic entity assumption Get answer to your question and much more 5.Which underlying assumption serves as the basis for preparing financial statements atregular artificial point in time?a.Accounting entityb.Going concernc.Accounting periodd.Stable monetary unit
6.Which basic accounting assumption is threatened by the existence of severe inflation inan economy? Get answer to your question and much more 7.The overriding qualitative characteristics of accounting information is Get answer to your question and much more Which underlying assumptions serves as the basis or preparing financial statements at Artificial points in time?According to the Framework of IAS/IFRS, the underlying assumptions for the preparation of financial statements are: Accrual basis The financial statements are prepared under the accrual basis.
Which underlying concepts serves as the basis for preparing financial statements at regular intervals of time?Accrual Basis
22. In order to meet their objectives, financial statements are prepared on the accrual basis of accounting.
What are the underlying assumptions when preparing financial statements?There are four basic assumptions of financial accounting: (1) economic entity, (2) fiscal period, (3) going concern, and (4) stable dollar. These assumptions are important because they form the building blocks on which financial accounting measurement is based.
What are the two basic underlying assumptions that must be employed in financial statements prepared in accordance with IFRS?IFRS assumptions. Going concern: The assumption that a business entity will be in operation for the foreseeable future.. Accrual basis: The assumption that the financial effects of transactions and events are recognized as they occur, and not when cash is received or paid.. |
Which underlying assumption serves as the basis for preparing financial statements at a regular artificial points in time?
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