Which of the following statements about the going concern assumption is not true?
A) it can justify the use of historical costs when measuring non-current assets.
B) it supports the use of assets such as Prepaid Expenses.
C) it supports the systematic allocation of depreciation over an asset's useful life.
D) it is used when an entity goes into liquidation.

Question

Quizplus · Accepted Answer

The going concern assumption assumes that the entity will continue to operate in the foreseeable future, and therefore going into liquidation contradicts this assumption.

Which of the Following Statements About the Going Concern Assumption