1. A states that the operations of the business will not stop in the near future and it will not force to liquidate its assets just to pay its debts and concern is “liquidating concern”.

2. The economic events are recorded in the period when the business transactions are recognized when it is assumed that the revenue or income are recorded in the period when it is earned rather than when it is collected while expenses is recognized when it is incurred rather than when it is paid.

3. The accounting period of a business maybe a calendar year or a fiscal year. A calendar year is a 12-month period that ends on December 31. A fiscal year is a 12-month period that ends on any month of the year.

4. The peso is assumed to remain relatively stable over the years in terms of purchasing power. It disregards any inflation in the economy in which the entity operates.