Fundamental Accounting assumptions (FAA)

Fundamental Accounting assumptions (FAA)

 There are three fundamental accounting assumptions: 

1. Going Concern 

2. Consistency 

3. Accrual  

When nothing is written about the fundamental accounting assumptions in the financial statements then it is assumed that these accounting assumptions have been followed in preparation of financial statements. It should be specifically disclosed if any of these assumption is not followed.  

Financial statements: -The aim of accounting is to keep records systematically to ascertain financial performance and financial position of enterprises and communicate the relevant financial information to management and public at large. - All enterprises prepare financial statements like balance sheet, profit and loss account, cash flow statement by following various concepts, principles and conventions etc. to know financial position 

Qualitative Characteristics of financial statements:-

1. Understandability:  The information in the financial statements must be easily understandable.

 2. Relevance:  -Information must be relevant for decision making need of users. -they must be able to evaluate past, present and future events.

3. Reliability: - Information must be reliable to be useful for the need of users.  it should be  free from errors and bias . user can depend upon it and can take their decisions.

 4.  Comparability:- User must be able to compare financial statement of different period to know financial position, performance and cash flows. 

5.   Materiality: - Relevance of information is affected by its materiality. 

6.   Faithful Representation:- Information must be presented  faithfully. the transaction and events to be reliable for user.

Join COC Education, We provided best video classes for CA/CMA/CS/Class 11th & 12th/ B.com/M.com

Contact us on- 9999631597, 8448322142, 7303445575

Visit YouTube Channel CA/CMA Santosh Kumar

Click Now for Demo Video www.coceducation.com/free-lectures

Join WhatsApp group for your domain course www.coceducation.com

 

ENROLLED WITH US TODAY AND ENLIGHTEN YOUR CAREER!!!

 

Latest Blogs

Salary of a Qualified CMA

Salary of a Qualified CMA


Why to choose career in "CMA" ?

The Reasons to Choose a Career in "CMA"


What Is Balance ScoreCard

What Is Balance ScoreCard A balanced scorecard is a strategic management performance metric used to identify and improve various internal business functions and their resulting external outcomes. Balanced scorecards are used to measure and provide feedback to organizations. #BalanceScoreCard




Top Reviews

Introduction to Statistics for CA Foundation

Introduction to Statistics for CA Foundation Business Mathematics, Logical Reasoning and Statistics is designed as per latest CA Foundation syllabus for Paper 3 to provide a firm grounding in the principles, techniques and practice. The book adopts self-study approach and has been written in student-friendly manner. With a blend of conceptual learning and problem-solving approach, it offers in-depth understanding of the basic mathematical and statistical tools. #introductiontostatistics


Chapter X of Companies Act 2013

Chapter X of Companies Act 2013 The company shall place the matter relating to such appointment for ratification by members at every annual general meeting. ... Under the Act, the provisions for rotation of auditors in the listed Company & certain other class of Companies, have been provided for. #chapterxofcompaniesact2013


Relevant sections under the Companies Act, 2013 dealing with fraud and false statements

Relevant sections under the Companies Act, 2013 dealing with fraud and false statements The new parent corporate law “The Companies Act 2013” is mostly ... I am limiting my write-up to the provisions to the Act, and I request the readers to refer relevant rules, if any, before ... in the 2013 Act is the Section 447 dealing with “Punishment for fraud”. ... Section 448


What is Corporate Image

What is Corporate Image A corporate identity or corporate image is the manner in which a corporation, firm or business enterprise presents itself to the public. The corporate identity is typically visualized by branding and with the use of trademarks, but it can also include things like product design, advertising, public relations etc #WhatisCorporateImage


What is Energy Audit

What is Energy Audit An energy audit is an inspection survey and an analysis of energy flows for energy conservation in a building. It may include a process or system to reduce the amount of energy input into the system without negatively affecting the output. #whatisenergyaudit