Accounting Postulate

An accounting postulate is a basic assumption in the field of accounting. Like any field, accounting has underlying axioms on which it is based. Accounting postulates form the basis of the accounting standards that govern how transactions are treated and recorded.

Accounting postulates include assumptions that transactions occur at identifiable times and that the entity will continue as a going concern. Others include: revenue is recorded when it is earned, businesses should choose an accounting method and not change it without sufficient reason, and the transactions of the business and its owners should be kept separate.

Although the postulates are widely accepted, disagreements can arise in specific circumstances. For example, for certain transactions, there may be disagreement upon the timing for recording items of revenue and expense.