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प्रश्न
Write short note on Going Concern Concept.
उत्तर
- It is assumed that the business will continue to exist for a long time in the future. Transactions are recorded on the assumption that the business will exist for an indefinite period of time. It is on this assumption that a distinction is made between capital expenditure and revenue expenditure. Fixed assets are recorded at their original cost less depreciation. Market value of fixed assets is not recorded, as these assets are not to be sold in the near future.
- A firm is said to be a going concern when there is neither the intention nor the necessity to wind up its affairs. In the absence of this assumption, no outside parties would enter into long-term contracts with the firm for supplying funds and goods. This assumption also justifies the distinction between fixed assets and current assets. The going concern concept also implies that the existing liabilities will be paid at maturity. Unsold stock of goods are taken to the next year.
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संबंधित प्रश्न
According to the ______ Principle of accounting, transactions are recorded on the assumption that the business will exist for an indefinite period of time.
Justify the following:
Every transaction is recorded in at least three accounts.
Define the term GAAP.
According to this concept, a business firm is treated as a unit separate and distinct from its owners.
What is meant by going concern concept of Accounting.
"The capital provided by the owner is treated as a liability of the firm." Explain the concept on which the above depends.
"Every transaction affects at least three accounts." Comment.
Explain the money measurement principle of accounting.
Explain The Dual Aspect Principle.
Explain the revenue principle.
