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Username: Password: Keep me signed in Log In The four basic assumptions that form the basis of financial accounting structure are business entity assumption, accounting period assumption, going concern assumption, and money measurement assumption. Get full access to Financial Accounting: In an Economic Context and 60K+ other titles, with free 10-day trial of O'Reilly. There's also live online events, interactive content, certification prep materials, and more. Key accounting assumptions state how a business is organized and operates. They provide structure to how business transactions are recorded. If any of these assumptions are not true, it may be necessary to alter the financial information produced by a business and reported in its financial statements. These key assumptions are:
Though the preceding assumptions may appear obvious, they are easily violated, and can lead to the production of financial statements that are fundamentally unsound. When a company's financial statements are audited, the auditors will be looking for violations of these accounting assumptions, and will refuse to render a favorable opinion on the statements until any issues found are corrected. Doing so will require that new financial statements be produced that reflect the corrected assumptions. What are the underlying assumptions of 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.
Which of the following is not an underlying assumption in financial accounting?Answer and Explanation: The correct answer is c. matching. Matching is a fundamental principle to the accrual basis method of accounting, not an underlying assumptions of accounting.
Which of the following are underlying assumptions of financial statements Mcq?c)It states that basic underlying assumptions of financial statements are Prudence andConservatism.
What are the 3 main assumptions of accounting?Fundamental Accounting Assumptions (Going Concern, Consistency & Accrual) as per AS-1. Going Concern: #1 Fundamental Accounting Assumption. ... . Consistency: #2 Fundamental Accounting Assumption. ... . Accrual: #3 Fundamental Accounting Assumption.. |