Which statement about the financial statement assumptions is NOT true?
A) Assets are originally recorded at cost.
B) Revenue is recorded when received and expenses are recorded when they are incurred.
C) Going concern means that financial statements are prepared on the basis that the business entity will continue operation in the foreseeable future.
D) The life of a business is divided into equal periods.

Question

Quizplus · Accepted Answer

Revenue is recorded when earned, not necessarily when received, and expenses are recorded when incurred, not necessarily when paid. This is the accrual basis of accounting.

Which Statement About the Financial Statement Assumptions Is NOT True