How is going concern assumption and accounting period
convention related?
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Answer / h.r. sreepada bhagi
Going Concern Concept signifies that the business entity
will remain existence for an unknown future or it's
perennial existence. However it's not possible to ensure
continued existence of a business entity with out
ascertaining the performance result & Assets-Liabilities
status periodically. In order to supplement & strengthen
going concern concept, Accounting period Concept is
relevant. This concept requires closure of Accounts at the
end of each successive accounting period (usually a year
containing 12 months).
This way both the accounting concepts are relevant & related.
| Is This Answer Correct ? | 1 Yes | 0 No |
Going concern concept says that the firm is not going to
close with in a short span of time.
Accounting concept means all the concepts of accountancy has
it's own significance
1. business entity concept - business and owner are seperate
2. money measurment concept- which deals with money
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