Going Concern
Definition
The assumption that the business will continue operating for the foreseeable future, which is what permits assets to be carried at cost rather than liquidation value. Where significant doubt exists, management and auditors must disclose it.
Related Terms in Accounting Principles
Fiscal Year
The twelve-month period a business uses for reporting and tax, which need not match the calendar year. India uses 1 April to 31 March; the UK tax year for individuals ends 5 April; many US businesses use the calendar year, and retailers often pick a trading low point.
Cost Accounting
The practice of capturing, assigning and analysing the cost of producing goods or delivering services, so that pricing, margin and efficiency decisions rest on real figures. Internal by nature, it is not bound by external reporting standards.
Adjusting Entries
Journal entries posted at the end of a period so that revenue and expenses fall in the right period under accrual accounting. The usual categories are accruals, prepayments, depreciation, and provisions such as doubtful debts.
Revenue Recognition
The rules determining when a sale may be recorded as revenue, which is when control of the goods or services passes to the customer rather than when cash arrives. Misapplying it is one of the most common causes of restated accounts.
Stop memorising terms — let HelloBooks do the work
AI-assisted bookkeeping that handles invoicing, GST, reconciliations, and reports automatically. Free to start.