Explain the concept of going concern giving example. - Vidyadip

Question

Explain the concept of going concern giving example.

✓

Answer

Going concern concept is an important concept of accounting. When business is started, it is assumed that the same will continue for very long period in future and same will not closed in near future. Example: $(1)$ Fixed assets are shown in balance-sheet at cost less depreciation, not as market value. $(2)$ Prepaid revenue expenses are shown on the asset side of balance sheet. $(3)$ Deferred revenue expenses are sometimes shown on the asset side of balance sheet. $(4)$ Semi finished goods or work-in-progress is valued at cost incurred there on $(5)$ Financial statements are prepared at the end of accounting period. $(6)$ Distinction is made between 'capital expenditure' and 'revenue expenditure'.

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Explore more

More "Give Answer As Asked . (3 Marks)" from P2 C6 Conventions, Assumption. Concepts and Principles ofAccounting→P2 C6 Conventions, Assumption. Concepts and Principles ofAccounting — all question types→Account STD 11 Commerce question papers→Gujarat Board STD 11 Commerce question papers→Gujarat Board question paper generator→

Similar questions

Write Journal Entry for Ram for the following transaction :

$1$	Goods sold to Rupali $Rs.14,000$, out of which cheque received for half amount, which deposited with bank.
$2$	Goods of $Rs.10,000$ purchased from Deepkala and paid half amount by cheque.
$3$	$Rs.400$ withdrawn from bank for personal expenses and Rs.800 for office expense.

Make classification of account type for the following:
(Sales return account, Opening stock account, Stationery stock account, Royalty account, Office expense account, Bharat University account, Computer acccount, Bajaj Company share account, Vashram & Sons account, Trade mark account, Brokerage account, Electricity account)

Explain the following terms: $(A)$ Capital receipts And $(B)$ Revenue receipts:

Write short note on General reserve.

State the differences between the Traditional Manual System and Computerised Accoutingsystem.

Accounting Software :

What is dishonour of a bill ? Discuss about the entries of the dishonour of a bill.

Explain the need for accounting principles or concepts or conventions or postulates orassumptions that are use while writing accounts and in preparing financial statements.

Pass journal entries for closing the follwoing accounts.
$(1)$ Salary account $₹ 8000$
$(2)$ Dividend account $₹ 6000$
$(3)$ Advertisement expense account $₹ 12,000$
$(4)$ Interest received account $₹ 3000$
$(5)$ Insurance premium account $₹ 5000$
$(6)$ Rent received account $₹ 4000$

Write Journal in the books of shree Vasant Traders for the following transaction:$2014$ June
$1$ A current account is opened with $SBI$ bank by depositing $₹ 20,000.$
$2$ Goods sold for $₹ 5000$, the amount of which directly deposited in bank.
$4$ Furniture of $₹ 10,000$ is purchased, payment is made through cheque.
$8$ Withdrawn from bank $₹ 400$ for personal expense and $₹ 700$ for office expenses.
$10$ A cheque of $₹ 1500$ received from Virat.
$15$ Goods of $₹ 3000$ sold on cash to Parthiv, Out of which $50 \%$ amount received by cheque.
$18$ Fire insurance premium $₹ 450$ and life insurance premium of $₹300$ are paid by cheque.
$22$ A cheque of dividend warrant of $₹ 200$ deposited in bank
$25$ Bank has credited $₹ 100$ for bank interest and debited $₹ 50$ as bank charges to our account.
$28$ A cheque of $₹ 800$ issued to Param as final settlement
$30$ A cheque of $₹ 600$ is received from Shivaji