BU227 Chapter Notes - Chapter 2: Uch, Cash Flow, Management Consulting
Document Summary
Investors and potential investors want to assess the entity"s ability to pay dividends in the future. They also want to evaluate how successful the company might be in the future, so that as the share price rises, investors can then sell their shares for more than they paid. The separate-entity assumption states that business transactions are separate from the transactions of the owners. The unit-of-measure assumption states that accounting information should be measured and reported in the national monetary unit. The continuity (going-concern) assumption states that businesses are assumed to continue to operate into the foreseeable future. Of land the price will rise and you are still to have it recorded at cost, because if you have no intention of selling then the current value really doesn"t matter. Assets are economic resources controlled by an entity as a result of past transactions or events and from which future economic benefits may be obtained.
