Commercial Applications
This concept assumes that the business will continue to exist for a long time in the future.
- Money measurement concept
- Going concern concept
- Business entity concept
- Realisation concept
Answer
Going concern concept
Reason — The Going Concern Concept 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 in the near future. This is why fixed assets are recorded at cost less depreciation rather than at market value.
Related Questions
Ms. Mira is auditing a company's financial statements and notices that no footnotes have been provided for significant liabilities. Which accounting principle is most likely being violated?
- Matching Principle
- Revenue Recognition Principle
- Principle of Full Disclosure
- Conservatism Principle
On the basis of this concept, only those transactions are recorded in accounts which can be expressed in terms of money.
- Money measurement concept
- Accounting period concept
- Business entity concept
- Realisation concept
It is due to this concept that financial statements are prepared at regular intervals, generally one year.
- Money measurement concept
- Accounting period concept
- Business entity concept
- Realisation concept
This principle suggests that every debit has a corresponding and equal credit.
- Matching principle
- Principle of full disclosure
- Dual aspect principle
- Realisation concept