澳洲cpa《FR》习题： financial statements
Which of the following identifies the assumption(s) underpinning the preparation of general purpose financial statements in accordance with the Conceptual Framework? Select which two options are correct.
B going concern
C cash basis of accounting
D accrual basis of accounting
The correct answer is Options B and D. Financial statements are normally prepared under the assumption that the entity is a going concern (Conceptual Framework, para. 4.1).
Another assumption underpinning the preparation of general purpose financial statements is the application of the accrual basis of accounting (Conceptual Framework, para. OB17).
Option A is incorrect because relevance is a qualitative characteristic of useful financial information and not an assumption on which general purpose financial statements are based.
Option C is incorrect because general purpose financial statements are prepared on an accrual basis of accounting, and not on a cash basis, except for the statement of cash flows
(paras OB17 and OB20)