Which of the following nonfinancial factors is most likely to be a cause of a going-concern problem?
A)Hiring a new CEO.
B)Loss of a key patent.
C)Announcing a new stock issue.
D)Replacing an old product line.

Question

Quizplus · Accepted Answer

The going-concern (also called the continuity)assumption means that a business is assumed to be capable of continuing its operations long enough to meet its obligations.The loss of a key patent could raise the concern that a business may not be capable of continuing its operations and meeting its obligations.

Which of the Following Nonfinancial Factors Is Most Likely to Be