MONETARY UNIT ASSUMPTION assumes that values can be relevantly measured in current monetary units. It is not necessary that the currency be stable or that inflation effects be negligible. The discount rate (cost of capital) automatically takes into account expected inflationary effect on dollar or inventory values for the specific entity. This supports economic valuation and enhances comparability.
PROPRIETORS DRAW is when a business proprietor draws money for personal needs, but is taxed on business results (at individuals' marginal rate) regardless of drawings.
DETECTION RISK is the risk that audit procedures will lead to a conclusion that material error does not exist when in fact such error does exist.
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