Distinguish between fundamental accounting assumption and accounting policies .

Fundamental Accounting Assumption Accounting Policies There are three fundamental accounting assumptions viz. Going Concern, Consistency and Accrual. There is no single list of accounting policies which are applied in all circumstances. As a result, there may be different accounting policies adopted by different enterprises. No disclosures is required if all the fundamental assumptions have been followed. Disclosure is required if a particular accounting policy has been followed. If fundamental accounting assumption is not followed, it is to be disclosed in the financial statements together with the reasons. If the policy is changed in subsequent year, the effect of such change should be disclosed in the financial statements. There is no option to choose fundamental accounting assumptions. The firm has an option to select a particular policy.