The going concern assumption is made when it is believed that:
A)A company is a separate legal entity.
B)A company will become insolvent within the next accounting period.
C)A company will remain in business for the foreseeable future.
D)The board of directors does not believe the company's financial report presents a true and fair view.

Question

Quizplus · Accepted Answer

The going concern assumption means that the company will continue to operate in the foreseeable future, meaning it is unlikely to become insolvent in the next accounting period. Option A is incorrect as it is related to the legal status of the company. Option B is contrary to the going concern assumption. Option D is irrelevant as it pertains to the opinion of the board of directors.

The Going Concern Assumption Is Made When It Is Believed