Provide the Definition of Each of the Following Accounting Assumptions

question 97

Essay

Provide the definition of each of the following accounting assumptions or principles.
$$\begin{array} { | l | l | } \hline \text { Assumption or Principle } & \text { Definition } \\\hline \text { Going Concern Assumption } & \\\hline \text { Cost Principle } & \\\hline\end{array}$$

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Definitions:

Business Activity

Collective commercial, industrial, or professional operations within an economy, indicative of its overall economic health.

MPC

Marginal Propensity to Consume, a measure in economics that indicates the proportion of additional income that a household is likely to spend on consumption rather than saving.

Full Employment GDP

Refers to the maximum level of output that an economy can produce without causing inflation, when unemployment is at its natural rate.

Equilibrium GDP

Equilibrium GDP is the level of real GDP where aggregate demand equals aggregate supply, indicating a state of economic balance without excess demand or supply.