Explanation of terms Basic assumptions of accounting, explanation of terms of accounting assumptions

The basic assumptions of accounting refer to the four basic assumptions of accounting:

1) Accounting entity.

Accounting subject refers to the spatial scope of enterprise accounting recognition, measurement and reporting.

An accounting entity is different from a legal entity. Generally speaking, a legal subject is necessarily an accounting entity, but an accounting entity is not necessarily a legal entity.

The accounting entity defines the spatial scope of accounting.

2) Going concern.

Going concern means that in the foreseeable future, the business will continue to operate at its current scale and status, without going out of business or making significant cuts.

Under the going concern assumption, the accounting recognition, measurement and reporting of an enterprise should be based on the premise of going concern. Clarification of this basic assumption means that the accounting entity will use the assets according to the intended use and settle the debt according to the established contractual conditions, on the basis of which the accountant can choose the accounting policy and valuation method.

3) Accounting periodization.

Accounting periodization refers to the division of the period of production and business activities of an enterprise's continuous operation into several consecutive periods of the same length.

Under the accounting periodization assumption, accounting should divide the accounting period, settle the accounts in installments and prepare financial reports.

The accounting period is divided into annual and interim periods. Both the year and the middle are based on the start and end dates of the Gregorian calendar. An interim period is a reporting period that is shorter than a full fiscal year.

4) Monetary measurement.

Monetary measurement refers to the monetary measurement of the accounting entity in the financial accounting confirmation, measurement and reporting, reflecting the production and business activities of the accounting entity.

Expenses to be amortized: also known as prepaid expenses. Expenses that have been paid but cannot be used as current expenses, one of the current asset items.

According to China's accounting system, low-value consumables can also be included in the expenses to be amortized. The concept of amortized costs is based on accrual accounting, which is also a requirement of the matching principle.

Long-term amortized expenses: various expenses that have been incurred by the enterprise but have an amortization period of more than 1 year (excluding 1 year), including start-up expenses, improvement expenses of leased fixed assets, major repair expenses of fixed assets with an amortization period of more than 1 year, ** issuance expenses, etc. Loan interest and rent, etc., which should be borne by the current period, shall not be treated as long-term amortized expenses.

Deferred assets: refer to expenses that have no exchange value in themselves, are not transferable, and are consumed once incurred, but can create future earnings for the enterprise and can be offset from the accounting period of future earnings. Deferred assets also refer to expenses other than fixed assets and intangible assets that cannot be fully included in the profit or loss of the current year and should be amortized over a longer period of time in subsequent years, including start-up expenses, expenses for improvement of leased fixed assets, and long-term amortized expenses with an amortization period of more than one year.

Assumptions in accounting: When we deal with daily accounts, the premise is that we assume that there is a business that is operating normally and continuously, and if there is no hypothetical enterprise, we have no way to set up the current accounting procedures. Accounting also deals with assumptions when dealing with every economic transaction, such as:

When our company purchases a batch of materials, its assumption is that there is a company that needs this batch of materials, otherwise we don't know why we purchase this batch of materials. Hahaha, I don't know if you can understand what I'm saying.

Accounting assumptions: Accounting assumptions are the basic assumptions of accounting, which refer to the reasonable judgments made by accountants on the changing environment and certain uncertain factors in which accounting is located based on objective, normal situations or trends. Accounting assumptions are the prerequisites that should be clear for the organization's accounting work, the basis for establishing accounting principles, and the necessary conditions for accounting practice, so it is also called the basic premise of accounting, which generally includes the four basic premises of accounting subject, continuing operation, accounting periodization and monetary measurement.

The term accounting assumption was first put forward in Peyton's book "Accounting Theory" in 1922, and was first discussed in "Basic Assumptions of Accounting" by Canning in the United States in 1961, when he regarded the basic assumptions of accounting as the basic premise or basic assumption of the economic, political and social environment on which accounting depends, and is a more basic and theoretical concept than the principle of accounting. Generally in accounting practice, it is practiced for a long time and accepted by people without proof, which is the premise for engaging in accounting work and studying accounting issues.

Hypothetical explanation: Tentatively assumed.

Hypothetical is a Chinese word, pronounced jiǎ shè, which means if; Conceived out of thin air; For the time being; Scientists have put forward claims to explain the phenomenon but have not yet proven it.

Sentence:

1. At present, the universe is only a hypothesis and has not been confirmed.

2. In order to prove the correctness of his argument during the debate, he raised a question and assumed that Zhang San, Li Si and the like carried it out.

3. It's easy to get carried away with the accuracy of these models, forgetting that when we make these simple assumptions, we choose to take shortcuts.

4. He used his efforts on the hypothesis that had long been proven to be untenable, and the result was that the ice was carved and decayed, and it was just a futile effort.

5. Suppose we want to measure talents by the scale of "oneism", then I will be grateful for not being sensitive, and I really can't find even a dozen.

6. Suppose you can't raise a penny to do business.

7. There are no assumptions in life, only real struggle and hard work can have a life worth recalling.

8. The assumptions he made were well-founded.

10. After experiments, the results are completely different from the original assumptions.

11. We have a hypothesis.

12. As part of the requirements, you need to make some assumptions about these interactions and plan for them.

13. This time, let's say you define a replication fragment.

14. Then you bring everyone together to discuss their assessments, assumptions, and tasks.

15. In the past, there has been an assumption that they will be open to them in this regard.

The audit hypothesis is summarized from the long-term audit practice, is the logical judgment made by the audit work and the relevant aspects involved, is the recognized rational understanding, it is the premise of the audit work, is the cornerstone of the audit theory.

i.Slippery and inclusive.

Audit assumptions are summarized and summarized from a large number of audit practices, which should be comprehensive and representative, and are a high-level summary of the audit work and the relevant aspects involved. At the same time, the presentation of audit assumptions should be concise and to the point.

2.Systematicness.

There are various types of audit assumptions that are highly generalized from audit practice, and together they constitute a system of audit assumptions. Although the various assumptions existing in the audit hypothesis system cannot contain or repeat each other, there is a logical connection between them and a distinct systematization. As auditing practices evolve, the audit assumption system will continue to improve.

3.Practicability.

Audit assumptions are rational understandings of auditing practice, which can be used to guide auditing practice, and have certain practicability and operability. If an audit assumption is just an empty and meaningless theoretical formulation, it cannot be called an audit hypothesis in itself.

4.Relativity.

The effectiveness of audit assumptions guiding audit practices is relative, not absolute. In exceptional cases, it may not necessarily be valid or correct; As auditing practice evolves, some of the original assumptions may also become useless and must be constantly revised, supplemented or new assumptions introduced.

It can also be seen that audit assumptions are not static, and they are constantly changing as auditing practices evolve. The reason why the audit hypothesis exists is that there are indeed some things in the auditing theory and practice that cannot be proved positively, and one can only be determined first, and if there is not enough counter-evidence to prove that it is wrong, this assumption can be considered to be valid;