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Description
Flashcards by rachel_heap_02, updated more than 1 year ago
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Created by rachel_heap_02
about 9 years ago
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| Question | Answer |
| Underlying Assumption One: Accrual basis; According to accrual basis of accounting, the effects of transactions and other events are recognised 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. | Basically... The accountant will record transactions as they occur - not when the cash has been received or sent. |
| Underlying Assumption Two: 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. | Basically... A going concern is a business that functions without the threat of liquidation for the foreseeable future, usually regarded as at least within 12 months. |
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