Proprietorship Business Transactions
BUS3061- Fundamentals of Accounting
The effects of accounting assumptions on the accounting process.
The major underlying assumptions or concepts of accounting are business entity, going concern (continuity), money measurement, stable dollar, and periodicity, business entity concept assumes that each business has an existence separate from its owners, creditors, employees, customers, interested parties, and other businesses, the going-concern (continuity) assumption states that an entity will continue to operate indefinitely unless strong evidence exists that the entity will terminate, and money measurement is the use of a monetary unit such as the dollar instead of physical or other units of measurement, the stable dollar assumption, the dollar is accepted as a reasonably stable unit of measurement, and the periodicity (time periods) assumption, accountants divide an entity's life into months or years to report its economic activities.
The effects of accounting concepts on the accounting process.
Other basic accounting concepts that affect accounting for entities are general-purpose financial statements, substance over form, consistency, double entry, and articulation, Accountants prepare general-purpose financial statements at regular intervals to meet many of the information needs of external parties and top-level i