GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Going concern concept
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Business entity concept
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Matching concept
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Cost concept
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Detailed explanation-1: -Going Concern Concept states that the business will not stop in near future. Therefore, fixed assets are depreciated over their useful life rather than over a shorter period on the expectation of early liquidation as per going concern concept.
Detailed explanation-2: -Classification of Assets: Convertibility If assets are classified based on their convertibility into cash, assets are classified as either current assets or fixed assets. An alternative expression of this concept is short-term vs. long-term assets.
Detailed explanation-3: -It does this with a process called depreciation for tangible assets or amortization for intangible assets. Any fixed asset that is subject to depreciation or amortization is considered a depreciable asset.