The accounting principle that assumes that a company will operate in the foreseeable future is:
A)Going concern.
B)Objectivity.
C)Liquidity.
D)Disclosure.

Question

Quizplus · Accepted Answer

The going concern principle assumes that a company will continue to operate into the foreseeable future. This principle is important in financial reporting because it allows for the use of historical cost accounting, which assumes that assets will continue to be used in the business and not sold off at liquidation prices.

The Accounting Principle That Assumes That a Company Will Operate