Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Financial Statements of a Company

Question:

Which of the following is not an assumption used in the preparation of financial statements of a company?

Options:

Going Concern

Conservatism

Money measurement

Both options 2 and 3

Correct Answer:

Conservatism

Explanation:

Postulates: Financial statements are prepared on certain basic assumptions (pre-requisites) known as postulates such as going concern postulate, money measurement postulate, realisation postulate, etc. Conservatism is a convention and not assumption.