Intermediate Accounting (16th Edition)

Published by Wiley
ISBN 10: 1118743202
ISBN 13: 978-1-11874-320-1

Chapter 2 - Conceptual Framework for Financial Reporting - Review and Practice - Questions - Page 62: 12


The four basic assumptions that underline the financial accounting structure comprise of: An economic entity assumption, a going concern assumption, a monetary unit assumption as well as a periodicity assumptions.

Work Step by Step

Normally, the accounting concepts are usually operational guidelines that are developed so as to assist the accounting of various transactions that normally take place in an enterprise. In addition, these concepts guide in developing rational responses to complicated issues related to issues of financial accounting and reporting. This is to say that the basic assumptions underlying financial accounting helps in coming up with the framework of accounting within an organization and a structural form.
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