When preparing the financial statements, we assume that the life of the entity will continue beyond the current period. Which assumption are we most likely following?
A)Stable dollar theory.
B)Going concern assumption.
C)Economic entity assumption.
D)Fiscal period assumption.

Question

Quizplus · Accepted Answer

The going concern assumption assumes that the entity will continue to operate into the foreseeable future. This assumption is necessary to prepare financial statements, as it allows for the recognition and measurement of assets and liabilities based on their expected future benefits and obligations. The other options - stable dollar theory, economic entity assumption, and fiscal period assumption - do not relate to this specific assumption.

When Preparing the Financial Statements, We Assume That the Life