BASIC ASSUMPTIONS OF ACCOUNTING

 BASIC ASSUMPTIONS OF ACCOUNTING

1 Accounting entity

2 Money measurement

3 Going on concern

4 Accounting period

HOW IT HELPS BUSINEES?

Accounting entity: mr.shine  started a business he invested 100000

Here this concept that we assume entity of the business id different from its owner. As far as the business is concerned, it owes  100000 tomr. shine.

MONEY MEASUREMENT: All  transactions are expressed in monitory terms e.g. land, raw materials, furniture and so on.

GOING CONCERN: This concept assumes that the business will continue for a long time. It’s one of the fundamental accounting assumptions. Stability and continuity for a long period

ACCOUNTING PERIOD: Here there is period  for the operations of business. Such period refers to the period of time for which the financial statements are prepared say for 6 months ,1 year.