Which best describes the term going concern?Group of answer choicesWhen current liabilities exceed current assetsThe ability of the entity to continue in operation for the foreseeable futureThe potential to contribute to the flow of the cash and cash equivalents to the entityThe expenses exceed income PreviousNext

The going concern principle assumes that the business:Group of answer choiceswill be liquidated in the near future.will remain in operation for the foreseeable future.will be purchased by another business.is in a growth industry.

Which of the following statements about the going concern assumption is not true?Question 3Select one:a.it supports the systematic allocation of depreciation over an asset’s useful life.b.it is used when an entity goes into liquidation.c.it supports the use of assets such as Prepaid Expenses.d.it can justify the use of historical costs when measuring non-current assets.

The going concern assumption is inappropriate when: Group of answer choices the business is just starting up. liquidation appears likely. market values are higher than costs. the business is organised as a sole trader.

The going concern assumption allows the entity to use the accrual basis of accounting.Accrual basis requires that the effects of transactions and other events are recognized when theyoccur, and not as cash is received or paidGroup of answer choicesTrueFalse

Going concern principle pertains to the assumption that financial statements are prepared on the basis of continuity of business operations.Select one:TrueFalse