3&4 ACC AOS 1 SAC 1

• entity assumption: the business is assumed to be an entity separate from the owner and other businesses and its records should be kept on this basis.
• accrual basis asssumption: revenues should be recognised when they are earned and expenses when they are incurred, regardless of when the cash has been received or paid, to determine an accurate net profit.
• going concern assumption: going concern assumes that the business will continue to operate in the future and its records are kept on this basis.
• period assumption: financial data is recorded and reported for a particular period of time, such as a month or a year, to obtain comparability of results.
• relevance: any financial information capable of making a difference in the decision-making of users must be recorded.
• faithful representation: financial information accurately reflects economic events, without bias.
• verifiability: different, knowledgeable, and independent observers must be assured that the information provided is faithfully represented and can be supported by source documents.
• comparability: financial information should be able to be compared to identify similarities and differences in the performances of the business in other periods. as well as the ability to compare financial information to similar entities.
• timeliness: information must be made available to decision-makers in time to be capable of influencing their decisions. if reports are made more frequently, any areas of concern can be identified in a timelier manner and corrective action can be taken.
• understandability: financial information must be presented clearly and concisely so that users with a reasonable knowledge of business or economic activities and information are easily able to comprehend it.