Which of the following is not an example of a mitigating factor that reduces the risk that the going concern assumption may be in doubt?
A) The ability to raise additional funds via borrowings
B) A letter of guarantee from a parent company
C) The ability to sell an unprofitable segment of the business
D) Significant rapid increase in competition

Question

Quizplus · Accepted Answer

Significant rapid increase in competition is a factor that increases the risk that the going concern assumption may be in doubt, as it may negatively affect the company's financial performance and ability to generate profits needed to continue operating. The other options (A, B, and C) are all examples of mitigating factors that reduce the risk that the going concern assumption may be in doubt, as they represent potential sources of additional funding or ability to cut costs that can help the company remain viable in the long-term.

Which of the Following Is Not an Example of a Mitigating