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State the accounting concepts / assumptions for each of the following situations: ...

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Accounting

  1. State the accounting concepts / assumptions for each of the following situations:

  1. Requires financial statement information to be supported by evidence rather than someones opinion or imagination.

  1. Requires financial statement information to be based on costs incurred in transactions.

  1. Requires financial statement to reflect the assumption that the business will continue operating instead of being closed or sold.

  1. Require that the same accounting methods be applied from one accounting period to another.

  1. Requires to report relevant, reliable and comparable information such that investors can make wise decisions as to whether to invest or not to invest in the company.

  1. Requires that revenue of the period to match with expenses of the same period to determine the net income for the year.

(6 marks)

  1. Provide FOUR (4) strengths of a sole proprietorship business.

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