Explain the following accounting assumptions i) Accrual ii) Going concern

Explain the following accounting assumptions
i) Accrual
ii) Going concern

Answers

i. Accrual
It explains thatrevenue and costs are accrued (that is, recognized as they are earned or incurred, not
as money is received or paid) matched with one another so far as their relationship can be established
or justifiably assumed, dealt with in the profit and loss account of the period to which they relate; but
if the accruals concept conflicts with the prudence concept then the prudence concept prevails
ii. Going concern
Explains thatthe enterprise will continue in operational existence for the foreseeable future. This
means that the profit and loss account and the balance sheet assume no intention or necessity to
liquidate or curtail significantly the scale of operation.

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Kavungya answered the question on May 15, 2019 at 12:51

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