Basic Assumption	Description
Economic Entity Assumption	An easy way to think about this assumption is that "everyone has a name."  The name differentiates one person from another. A business has a name and a Federal ID number. The owner of the business has a name and a personal social security number. This assumption simply says that the business and the owner of the business are two separate legal and economic entities. Each entity should account and report its own financial activities.
Going Concern Assumption	An easy way to think about this assumption is "that life goes on."  Since we assume this, absent evidence to the contrary, when accounting for a company we assume that the company will have a long, but probably not indefinite life. This assumption enables accountants to make estimates about asset lives and how transactions might be amortized over time. This assumption enables an accountant to use accrual accounting which records accrual and deferral entries as of each balance sheet date.
Monetary Unit Assumption	Money is the common denominator of economic activity and provides an appropriate basis for accounting measurement and analysis. "$" = "$" Accountants assume that the monetary unit (e.g., U.S. Dollar) will remain relatively stable over the years in terms of purchasing power. In essence, this assumption disregards the effects of inflation or deflation in the economy in which the entity operates. This assumption provides support for the "Historical Cost" principle.
Periodicity Assumption	The "Going Concern Assumption" presumes that an entity has a long life.  The "Periodicity Assumption" suggests that an accountant can artificially divide that life into defined time segments and make measurements, estimates, and adjustments accordingly. The most typical time segment = Calendar Year Next most typical time segment = Fiscal Year