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

Question

Quizplus · Accepted Answer

Going concern assumption assumes that the business will continue to operate in the foreseeable future and will not be forced to liquidate or scale down its operations because of any anticipated events or further financial issues. This assumption is fundamental in the preparation of financial statements and the interpretation of financial results. It allows for the proper valuation of assets and liabilities and the accurate presentation of financial position and performance.

Which Accounting Assumption Assumes That an Enterprise Will Continue in Operation