In such cases, there is a need to value the assets at the market value. Since there is the historical method of cost valuation involved, we can safely assume that the company will not go off business for an indefinite period. Now, this assumption is particularly very important because this can allow some proper and appropriate methods of accounting for the depreciation and the fixed assets as well. So, the assumption of the company going strong is one of the fundamental assumptions. So, there is an assumption made here that no matter what happens, the company will continue to exist for a long period, quite possibly indefinitely. Now, this is a particular assumption that is made based on a principle that states while making certain financial statements for any particular entity, people can assume that the particular company doesn’t have any particular plans for winding up and that too in the near future. Here we are going to discuss some of the important assumptions of accounting that are used by the companies.
Students can rely on our notes to get some information on the chapter and the topic. These assumptions are made according to the Accounting Standards of India. When it comes to the three fundamental accounting assumptions, these are just some principles or concepts which are commonly assumed to be followed during the accounting transactions. What Are the Fundamental Accounting Assumptions So, here the students are going to learn about these 3 fundamental accounting assumptions which are known as Going Concern, Consistency, and Accrual. If there aren’t any specified assumptions other than these, then it will be assumed that these principles would be implemented in the whole process of preparing the final accounts for the company. During the preparation of the proper and final accounts for any business or any company, there are certain theoretical assumptions of accounting made that people tend to follow pretty commonly These are known as the fundamental accounting assumptions.
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