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Question
Financial statements are prepared on certain basic assumptions (pre-requisites) known as ______.
Options
Provision of Companies Act,2013
Accounting Standards
Postulates
Basis of Accounting
MCQ
Fill in the Blanks
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Solution
Financial statements are prepared on certain basic assumptions (pre-requisites) known as postulates.
Explanation:
Financial statements are prepared based on certain fundamental assumptions called accounting postulates or concepts. These postulates form the foundation on which accounting principles and standards are built to ensure the financial information is reliable and comparable. Examples of such assumptions include the going concern concept, the consistency concept, the accrual concept, and the historical cost concept.
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