The going concern assumption states that the business will continue in operation for the foreseeable future.

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The going concern assumption is a fundamental principle of accounting that assumes that the business entity will continue to operate indefinitely. This assumption allows businesses to apply the accrual accounting method and to prepare financial statements that provide a fair view of their financial position, performance, and cash flows. Without the going concern assumption, the financial statements would need to be prepared on a liquidation basis, which assumes that the business will be sold or wound up in the near future.

The Going Concern Assumption States That the Business Will Continue