The following points highlight the four important postulates in accounting. The postulates are: 1. Entity Postulates 2. Going Concern Postulate 3. Money Measurement Postulate 4. Time Period Postulate. Postulate # 1. Entity Postulates: The entity postulate assumes that the financial statements and other accounting information are for the specific business enterprise which is distinct from its owners. Attention in financial [...]
The following points highlight the four main considerations which guide the selection of accounting principles. The considerations are: 1. Accurate Presentation 2. Conservatism 3. Profit Maximization 4. Income Smoothing. Consideration # 1. Accurate Presentation: One of the criteria for assessing the usefulness of accounting information is accuracy in presentation of the underlying events and transactions. This criterion may be used [...]
The following points highlight the three important users of accounting information. The users are: 1. Management 2. Users with Direct Financial Interest 3. Users with Indirect Financial Interest. User # 1. Management: Management is a group of people who are responsible for using the resources and managing the affairs of an entity to achieve the goals and objectives. Managers perform [...]