The assumption that assumes a company will continue in operation long enough to carry out its existing objectives is the:
A) economic entity assumption.
B) going concern assumption.
C) monetary unit assumption.
D) periodicity assumption.

Question

Quizplus · Accepted Answer

The going concern assumption assumes that a company will continue in operation long enough to carry out its existing objectives. It is a foundational assumption in financial reporting, as it affects the valuation of assets and liabilities, as well as the calculation of depreciation and amortization expense.

The Assumption That Assumes a Company Will Continue in Operation