Accounting Standards Generally Require the Financial Statements to Be Prepared

question 82

True/False

Accounting standards generally require the financial statements to be prepared on the assumption an entity will continue its operations for a reasonable amount of time.

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Definitions:

Costs Paid

Expenses that a company has incurred and settled through payment.

Cash Basis

An accounting method where revenues and expenses are recognized only when cash is actually received or paid out, ignoring receivables and payables.

Expense Recognition

The accounting principle that expenses should be recognized in the period in which they are incurred, regardless of when payment is made.

Economic Life

The expected period during which an asset remains useful to a particular entity or project, often affecting its depreciation schedules.