BUSINESS ADMINISTRATION
BUSINESS ENVIRONMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The cost principle
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The economic entity concept
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The monetary unit assumption
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The going concern assumption
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Detailed explanation-1: -Going concern concept is one of the accounting principles that states that a business entity will continue running its operations in the foreseeable future and will not be liquidated or forced to discontinue operations for any reason.
Detailed explanation-2: -The going concern principle is the assumption that an entity will remain in business for the foreseeable future. Conversely, this means the entity will not be forced to halt operations and liquidate its assets in the near term at what may be very low fire-sale prices.
Detailed explanation-3: -"Going concern” is an accounting term used to describe a business that is expected to operate for the foreseeable future or at least the next 12 months. It assumes that the business can generate income, meet its obligations and doesn’t plan or won’t need to liquidate in the coming year.
Detailed explanation-4: -The going concern assumption assumes a business will continue to operate in the foreseeable future.
Detailed explanation-5: -The correct answer is B. The going concern concept assumes that the business will continue for the foreseeable future.