Which of the following concepts (or principles)require an assumption that the entity will remain in operation for the foreseeable future?
A) Entity concept
B) Faithful representation principle
C) Going-concern concept
D) Cost principle

Question

Quizplus · Accepted Answer

The going-concern concept assumes that the entity will continue to operate in the foreseeable future. This assumption is necessary for the preparation of financial statements in accordance with generally accepted accounting principles. By assuming that the entity will continue to operate, assets can be valued at their expected future cash flows rather than their current market value, and liabilities can be reported at their expected settlement amounts rather than their current liquidation values. This concept is essential for the interpretation and analysis of financial statements by investors, creditors, and other stakeholders.

Which of the Following Concepts (Or Principles)require an Assumption That