The going-concern assumption states that the:
A)company will always maximize the profit for shareholders.
B)company is not expected to go out of business in the near future.
C)company is a separate concern from the shareholders.
D)company's results will be reported in a consistent manner from period to period.

Question

Quizplus · Accepted Answer

The going-concern assumption is a fundamental accounting principle that assumes that a company will not be forced to liquidate or cease operations in the near future. This assumption enables companies to prepare financial statements under the premise that they will continue to operate in the foreseeable future, and it allows investors and creditors to make informed decisions based on this presumption. It is not related to maximizing profits, being a separate concern from shareholders, or the consistency of reporting results from period to period.

The Going-Concern Assumption States That The