Which of the following are the basic postulates underlying historical costing?
A)Going Concern, Time Period, Market Prices, Monetary Unit
B)Objectivity, Time Period, Accounting Entity, Monetary Unit
C)Going Concern, Time Period, Accounting Entity, Monetary Unit
D)Going Concern, Time Period, Financial Statements, Monetary Unit

Question

Quizplus · Accepted Answer

The basic postulates underlying historical costing are Going Concern (assumption that the company will continue to operate indefinitely), Time Period (dividing the life of a company into specific time periods), Accounting Entity (treating the company as a distinct entity from its owners), and Monetary Unit (expressing transactions in a single currency unit). Therefore, option C includes all the correct postulates. Option A is incorrect because Market Prices is not a basic postulate of historical costing. Option B is incorrect because Accounting Entity is a basic postulate and Objectivity is not. Option D is incorrect because Financial Statements is not a basic postulate.

Which of the Following Are the Basic Postulates Underlying Historical