Accounting assumption and qualitative characteristics

Question 1

what is the entity assumption

Answer 1

the record of assets, liabilities and business activities of the entity are kept completely seperate from those of the owner of the entity as well as from those of other entities.

Question 2

what is faithful representation

Answer 2

the information recorded must be complete, free from material error and without bias and a faithful representation of the real-world economic event it represents. Source documents

Question 3

what is verifiability

Answer 3

verifiability means that different knowledgeable and independent observers can arrive at the same conclusion that particular depiction of an event is faithfully represented by retaining source documents that can be checked through auditing. Estimates cannot be verified