Multiple choice

When should fundamental accounting assumptions followed be disclosed in the financial statement?

  1. Should be disclosed always

  2. Disclosed only when not followed

  3. Disclosed only when followed

  4. Disclosure depends on the nature of the enterprise
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

According to AS-1, disclosure of fundamental accounting assumptions (going concern, accrual, business entity) is required only when they are NOT followed. If these assumptions are followed (which is normally the case), no disclosure is necessary in the financial statements.

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