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Accountancy Project

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Accountancy Project
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  • Hey Rajvir, have you studied for the Accounting Assumptions test?
  • Of course I have, all the concepts are crystal clear in my mind!
  • Oh really? Then tell me what is going concern assumption?
  • As per this assumption transactions are recorded at the time of their happening, not at the time of their final settlement.
  • No you're wrong. That's accrual assumption not going concern assumption.
  • Don't try to make a fool of me! If you know so much then you only tell what going concern assumption is.
  • As per going concern assumption, it is assumed that business will go on for an indefinite period of time so purchase of assets is capital expenditure.
  • But isn't that consistency assumption?
  • No, as per consistency assumption same accounting practices must be followed every year.
  • And I thought that was going concern assumption.
  • I guess you are not going to score good in the test.
  • Oh no! My mother is gonna kill me if I don't score good!
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