The principle prescribing that financial statements reflect the assumption that the business will continue operating instead of being closed or sold,unless evidence shows that it will not continue,is the:
A)Going-concern principle
B)Business entity principle
C)Objectivity principle
D)Cost principle
E)Monetary unit principle

Question

Quizplus · Accepted Answer

The going-concern principle assumes that the business will continue to operate in the foreseeable future. This principle is fundamental in accounting, as it allows financial statements to reflect the actual value of the company's assets and liabilities. Without this principle, financial statements would have to reflect the liquidation value of the company's assets, which would likely differ significantly from their going-concern value.

The Principle Prescribing That Financial Statements Reflect the Assumption That