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

The significant rapid increase in competition is not an example of a mitigating factor that reduces the risk that the going concern assumption may be in doubt. Instead, it increases the risk that the entity may not be able to continue as a going concern. Option A, B, and C are examples of mitigating factors that reduce the risk that the going concern assumption may be in doubt.

Which of the Following Is Not an Example of a Mitigating