In a business firm assets of the business are valued on the basis of their intrinsic value rather th...........

General Accounting Principles Concepts of Accounting

In a business firm, assets of the business are valued on the basis of their intrinsic value rather than realizable value. This accounting is based on

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EPFO APFC 2023

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money measurement concept

matching concept

going concern assumption

consistency principle

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Explanation:

- Money measurement concept: Only transactions measurable in monetary terms are recorded in the accounts. It doesn't deal with asset valuation methods.

- Matching concept: Expenses are matched with related revenues in the same period. This doesn't relate to how assets are valued.

- Going concern assumption: Under this, it is assumed that the business will continue its operations for the foreseeable future, so assets are valued at cost or intrinsic value, not at the price they could currently sell for (realizable value).

- Consistency principle: This means a business uses the same accounting methods over time. It’s about method, not asset valuation basis.