ACCT 301 ACCT301 ACCT/301 Homework 5

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ACCT 301 ACCT301 ACCT/301 Homework 5

Acct 301 Homework 5

Week five is about understanding long-term investments, obligations, financial reporting/analysis, and statement of cash flows.

Accounting Assumptions

Accounting assumptions show how a business operates and is organised; they also show how business transactions should be recorded. Here are some of the fundamental assumptions:

–Entity Assumption assumes that transaction from a business, and its owner are not combined but recorded separately.

–Going concern assumption is assuming a business will continue to operate in the future; if this not true, it should be disclosed.

–Periodicity assumption is reporting financial results for a specific and consistent period.

–Monetary unit assumption means measuring transaction in monetary terms.

–Stable currency assumption is assuming currency will remain stable for a while and will not lose purchasing power.

Long- Term Investment and Obligations

Long-term investment is one of the accounts on a company’s balance sheet representing investments a

ACCT 301 ACCT301 ACCT/301 Homework 5

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