Accounting assumptions are also known as the three very basic concepts or principles of accounting. These are considered to be followed in the financial transactions of the business organization. So there is a need for a distinct system. These concepts are important to be adhered to for better accounting understanding. The students can hire accounting assignment help from the experts to gain complete knowledge about these assumptions.

This is not at all compulsory for every business organization to follow these fundamental accounting principles. This is considered completely acceptable if any business organization does not want to follow these assumptions while recording on their financial transactions. However, if any organization has not followed these fundamental assumptions then it is mandatory for them to specifically disclose the information. This information goes with their financial statements. This is the way the users can get complete knowledge about those facts.

When it comes to the preparation of the financial statements of the company, the fundamental accounting assumptions are considered important. But in the cases where they have not mentioned anything then this will be considered that the company has not followed accounting assumptions in the financial statements. Further, we will be talking about the accounting assumptions to help you understand these in a better way.

Important Accounting Assumptions

Going Concern:- This is the foremost assumption that is based on the principle. It states that while the creation of the financial statements of the organization, it is assumed that company has no special plans to wind up in the future. This is the assumption that the company will exist indefinitely. The company will keep on going. There are so many reasons why this assumption is considered important. This allows accountants to appropriately measure the fixed assets and depreciation. For the valuation of assets, most of the organizations follow the historical cost method. This should be assumed that the business are not in danger. There is no risk of shutting down in the future. Under these circumstance, the market value is determined to value the assets. On the other hand in the going concern case, there is no need to take account in the increase and decrease prices of the assets.

Consistency:- This is the assumption that intends to hold the policies and methodology of the organization unchanged and consistent. This helps in drawing accurate conclusions and facilitate the decision-making process. The formulation states that it is mandatory to compare both inter-firm and inter-period (intra-firm). It is possible to the comparisons only when during that time of comparison; different entities have adopted the same policies and methodology. The students can ask for the Accounting assignment writing help from the professionals of BookMyEssay.

Accrual:- The third major concept of accounting assumption is the accrual concept. According to this fundamental assumption, revenue is acknowledged when it is received. On the other hand, the expenses are acknowledged in the accounting period under which they helped in earning the revenue. Under both cases, this criterion should not be followed whether money is received or not (revenue case) and money is paid or not (expenses case). In this sense, a small commitment to pay is also acknowledged revenue. In the case of revenue from the point of view of the receiver and in case of expense from the point of view of the payer.

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