This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Working Ratio: Current assets / Current liabilities Underlying assumptions of accounting Separate entity – activities (transactions) of the business are separate from activities (transactions) of the owners Going concern (continuity) – a business will operate into the future, or assumed to have an indefinite life. Time period (periodicity) – the indefinite life of a business must be reported over a series of shorter time periods, like a year. 17 Unit of measure – each business will account for its transactions and report its activities using the currency unit of the firm’s primary place of business. CAN THESE ASSUMPTIONS BE VIOLATED?...
View Full Document
This note was uploaded on 01/31/2011 for the course ACCOUNTING 301 taught by Professor Chen during the Spring '10 term at George Mason.
- Spring '10