The going concern assumption is concerned with
A)the company's ability to continue operations long enough to carry out its existing obligations.
B)any information that is capable of influencing the decisions of anyone using the financial statements.
C)measuring ongoing business activities at their exchange price at the time of the initial external transaction.
D)offsetting management's natural optimism by providing a prudent approach to uncertainty in financial statement items.

Question

Quizplus · Accepted Answer

The going concern assumption assumes that a company will continue to operate long enough to fulfill its existing obligations, therefore indicating that the company is financially stable and will not be forced to sell off its assets in order to fulfill its obligations. This assumption is important because it is the basis for the preparation of financial statements, and a company's ability to continue as a going concern is an important factor in assessing its financial health.

The Going Concern Assumption Is Concerned with