Commercial Applications
Which accounting principle specifies that business will exist for an indefinite period of time?
- The Money measurement principle
- The Business entity principle
- The Dual aspect principle
- The Going concern principle
GAAP
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Answer
The Going concern principle
Reason — The Going Concern Principle assumes that the business will continue to exist for an indefinite period of time. There is neither the intention nor the necessity to wind up its affairs, and this assumption justifies the recording of fixed assets at cost less depreciation.
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Related Questions
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
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