'Existence is an assertion about account balances at the period end.'
Is this statement true or false?
As per answer bank, the above statement is true. How? What I understand is that this statement represents Accuracy, Valuation & Allocation assertion. Am I right?
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Question #29 from question bank of Study text valid from Sept 19 to June 2020
See Chapter 16 of the notes - page 84 - existence is a separate assertion. It means, for example, that an item of equipment physically exists at the reporting date - this is quite separate from the assertion that it's measurement in the SoFP ("valuation") is appropriate and that depreciation has been appropriately allocated.
So, the statement "Existence is an assertion about account balances at the period end" is true?
Yes - if you download the notes the pdf can be searched - on page 84:
"These assertions relate to the PERIOD END:
? Existence – assets, liabilities and equity interests exist.
..."
Thank You
You're welcome!
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