Commercial Applications
According to the …………… principle of accounting, transactions are recorded on the assumption that the business will exist for an indefinite period of time.
- Business Entity Concept
- Dual Aspect
- Going Concern Concept
- Money Measurement Concept
Answer
Going Concern Concept
Reason — The Going Concern Concept assumes that the business will continue to exist for an indefinite period in the future. Transactions are recorded on this assumption, which justifies the distinction between capital and revenue expenditure and the recording of fixed assets at cost less depreciation.
Related Questions
According to Business Entity Concept:
- Distinction should be made between fixed assets and current assets.
- Distinction should be made between business transactions and personal transactions.
- Distinction should be made between Capital expenditure and revenue expenditure.
- Accounting equation is always true.
Accounting means ……………
- Keeping an account of money received
- Keeping an account of money spent
- Keeping an account of money spent and loan received.
- Keeping an account of money received and money spent.
Ledger is also called the ……………
- Journal book
- Principal book
- Account book
- Subsidiary book
The retirement of manager of the company cannot be recorded in the book of accounts, because it is not possible to estimate the financial effect of retirement. Which accounting principle would be applicable for the above statement?
- The Going Concern Concept
- The Business Entity Concept
- Money Measurement Concept
- The Dual Aspect Concept