Which accounting assumption assumes that an enterprise will continue in operation long enough to carry out its existing objectives and commitment?
A) Monetary unit assumption.
B) Economic entity assumption.
C) Periodicity assumption.
D) Going concern assumption.

Question

Quizplus · Accepted Answer

The going concern assumption assumes that a business entity will continue to operate in the future and fulfill its commitments and objectives. This assumption is important in financial reporting as it allows for the preparation of financial statements under the assumption that the entity will not be liquidated in the near future, which affects the reporting of assets, liabilities, and capital.

Which Accounting Assumption Assumes That an Enterprise Will Continue in Operation