The historical cost convention looks backwards but the going concern convention looks forwards. Required: (a) Explain clearly

Question:

‘The historical cost convention looks backwards but the going concern convention looks forwards.’

Required:

(a) Explain clearly what is meant by:

(i ) the historical cost convention;

(ii ) the going concern convention.

(b) Does traditional financial accounting, using the historical cost convention, make the going concern convention unnecessary? Explain your answer fully.

(c) Which do you think a shareholder is likely to find more useful – a report on the past or an estimate of the future? Why?

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Frank Woods Business Accounting An Introduction To Financial Accounting

ISBN: 9781292365435

15th Edition

Authors: Alan Sangster, Lewis Gordon, Frank Wood

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Question Posted: Feb 29, 2024 09:01 AM

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The historical cost convention looks backwards but the going concern convention looks forwards. Required: (a) Explain clearly

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a See text b The historical cost convention does not make the going concern convention unnecessary S...View the full answer

Frank Woods Business Accounting An Introduction To Financial Accounting

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