What are the four basic accounting assumptions in China?
(a) Accounting Entity An accounting entity can be an enterprise, an enterprise group or the accounting department of an enterprise. (b) Continuity Postulate The Accounting System stipulates that, under normal circumstances, the accounting treatment to be adopted by enterprises should be based on continuity postulate. For instance, the historical costing method is used for the assets and liabilities of an enterprise, and historical cost is used for the depreciation method of fixed assets. (c) Accounting Period and Accounting Year An enterprise should account for its transactions or events and prepare financial statements in distinct accounting periods. Accounting periods may be a year, half year, a quarter or a month, commencing on the first day thereof according to the calendar year. (d) Measurement Currency and Reporting Currency Renminbi is the reporting currency of enterprises. While a certain foreign currency may be used as the reporting currency for enterprises which frequently en
