4 basic assumptions of accounting.

What are duties of internal auditor?

The basic assumptions of accounting are like foundation pillars on which the structure of accounting is based.

The following are four basic assumptions of accounting

Business entity: According to this assumption, a business is treated as a separate entity and distinct from its owners. Its books of account should record only those transactions which belong only to the firm and should not include personal transactions and activities of the owner. The personal resources of the proprietor(s) affect the accounting records of business only when there is an introduction of new capital into the business or drawings are taken out of it by them. read more