Which of the following is NOT an implication of the going-concern assumption?
A) The historical cost principle is credible.
B) Depreciation and amortization policies are justifiable and appropriate.
C) The current/noncurrent classification of assets and liabilities is justifiable and significant.
D) Amortizing research and development costs over multiple periods is justifiable and appropriate.

Question

Quizplus · Accepted Answer

The going-concern assumption implies that a business will continue to operate indefinitely, not liquidate in the near future. This assumption justifies the use of historical cost, depreciation, and the classification of assets and liabilities as current or noncurrent. However, it does not directly justify amortizing research and development costs over multiple periods, as these costs are typically expensed as incurred under many accounting frameworks due to the uncertainty of future economic benefits.

Which of the Following Is NOT an Implication of the Going-Concern