Define the Four Basic Assumptions Underlying Generally Accepted Accounting Principles

question 15

Essay

Define the four basic assumptions underlying Generally Accepted Accounting Principles: (a)economic entity, (b)going concern, (c)periodicity, (d)monetary unit.

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Definitions:

Payroll Taxes

Taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff.

Indirect Labor

Labor costs associated with the production process that cannot be directly linked to specific units or products, such as maintenance personnel salaries.

Manufacturing Equipment

Machines and tools used in the process of producing goods.

Direct Materials

Direct materials are raw materials that can be directly attributed to the production of goods.