For a going concern, obligations are typically paid for purchased items ____.
A) when the order is placed
B) when the items are received
C) when the bill is received
D) prior to the due date of the bill

Question

Quizplus · Accepted Answer

When a business is a going concern, it is assumed that it will continue to operate in the foreseeable future. This means that the business is expected to be able to pay its obligations as they come due. Therefore, obligations are typically paid for purchased items prior to the due date of the bill.

For a Going Concern, Obligations Are Typically Paid for Purchased