Accounting!!!?

Question

1) What is significance of going concern concept?
2)Explain concept of historical cost and its importance
3)Explain meaning significance of money measurement concept.

Answer 1

1) What is significance of going concern concept?
This accounting principle assumes that a company will continue to exist long enough to carry out its objectives and commitments and will not liquidate in the foreseeable future. If the company's financial situation is such that the accountant believes the company will not be able to continue on, the accountant is required to disclose this assessment. This allows for orderly allocation of long-term costs and revenues based on a presumption that the business will continue to operate into the future. The going concern principle allows the company to defer some of its prepaid expenses until future accounting periods.

2)Explain concept of historical cost and its importance
The cost principle requires that all transactions be recorded at original (historical) cost. They must also be stored in the records and presented on the financial statements at historical cost. Historical cost is what was paid or charged for something. This is important because prices change all the time. If you bought something today and tomorrow the price changes, you can't go back and amend the books, you'll be doing this to everything you bought every day, so that's why you need the principle of historical cost. However there are exceptions (e.g. revalutations) but you'll learn these later.

3)Explain meaning significance of money measurement concept.
This significance of this assumption is easily taken for granted. It means that accounting measures transactions and events in units of money. To understand the impact of the monetary unit assumption, think about your personal car for a moment. In your mind, how did you visualize it -- as a dollar amount, or by model, age, mileage, functionality, etc.? Stated differently, if someone asked me what I drive, I would not say $10,000; I would simply report the make and model of my vehicle. However, accounting purports to measure all things in units of money. This solution overcomes the problems that would arise by mixing measures in the financial statements (e.g., imagine the confusion of combining acres of land, cash in bank, square feet of buildings, etc.). The monetary unit assumption is core and essential to the double-entry, self-balancing accounting model.

Answer 2

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Answer 3

. You've got the answers in your Principals of Accounting book, pages 137 to 141. Read 'em.

Answer 4

YOU!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! you never email me what are you doing....im guessing accounting...i know the answer....F=MA!!!
hahaha well E-mail me i miss you soooooooooooooo much i am studying so much you better be too becuase we are going to University of Chicago together!!! youll prob get into Wharton but if you go there then ive decided i want to go to Harvard for their quantum physics program.