An example of a factor that mitigates doubts about an entity's ability to continue as a going concern would be _______.
A)a letter of guarantee from a parent company
B)the ability to raise additional funds through the issuance of more stock
C)the ability to sell an unprofitable segment of the business
D)All of these examples are mitigating factors.

Question

Quizplus · Accepted Answer

All of the options listed could potentially mitigate doubts about an entity's ability to continue as a going concern. A letter of guarantee from a parent company provides assurance of financial support, raising additional funds through the issuance of more stock can improve liquidity, and selling an unprofitable segment of the business can reduce costs and improve profitability. Therefore, any combination of these factors could be considered a mitigating factor.

An Example of a Factor That Mitigates Doubts About an Entity's