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

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 accounting principle states that financial statements should reflect the assumption that the business will continue to operate indefinitely?a.Materiality principleb.Going concern principlec.Consistency principled.Conservatism principle

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

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 assumption is inappropriate when: a. the business is organised as a sole trader. b. liquidation appears likely. c. the business is just starting up. d. market values are higher than costs.