A) Conservatism B) Materiality C) Consistency D) All of the above
A) That a business will continue to operate for the foreseeable future
The going concern assumption under GAAP assumes that a business will continue to operate for the foreseeable future, allowing accountants to value assets and liabilities based on their expected use.
The FASB is an independent board responsible for developing and issuing accounting standards, known as Generally Accepted Accounting Principles (GAAP), to guide financial reporting.
A) Cash accounting recognizes revenues when cash is received, while accrual accounting recognizes revenues when earned
Under GAAP, cash accounting recognizes revenues and expenses when cash is received or paid, while accrual accounting recognizes revenues and expenses when earned or incurred, regardless of when cash is received or paid.