Going Concern Assumption The going concern principle. also known as continuity assumption, means that a business entity will continue to operate for at least ano her accounting period. This principle is the reason w.. assets are generan, presented in the b lance smeet a cost rathert. rat . ir maret .a.ue and long term asseis are included in the books unt they are full, utilized anu A cru.. Basis of Accounany The accrual basis of accounting means that the financial statements re prepared where income no expenses must be recogn ed in the accounting penods to which these are nourred. Inis me ns thetre. enue or income is recogni ed wen eamed regardless ourthen p ment is recei ed anu expenses are recognized when incurred regardless of when these are p id. & amples. a. ..Y 2 Compan, rendered repair services to a client on Vctober 10 20It Tre client paid amer yu days which is lanuar, Y 2 20. The income w: be recognized when the service has already been rendered Hence, the income s..oud be recognized in coper 201! e. en in it has now, et been comected as of that date. 3. urgis compan, received its electricity bill for the month of December cu.y on Janu ry 5, zuzu and p id it on January .,2020. When should be electricity expense be recorded: The electricit, expense s.. Ill be recorded in december, 2.10 e-en if the bill has been jus id no received in Janu ry. Zuzu because electric ty consumption pertains to the month of December, 2- 1