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CMA Intermediate · Financial Accounting · Accounting Fundamentals

Which of the following is a fundamental accounting assumption recognised under AS 1 Disclosure of Accounting Policies?

Going concern is a fundamental accounting assumption under AS 1, along with consistency and accrual. Prudence, substance over form and materiality are considerations for selecting and applying accounting policies, not fundamental assumptions, so they are not the correct answer.

  1. APrudence
  2. BMateriality
  3. CGoing concernCorrect
  4. DSubstance over form

Explanation

AS 1 identifies three fundamental accounting assumptions: going concern, consistency and accrual. Prudence, substance over form and materiality are considerations governing selection of accounting policies, not fundamental assumptions.

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