Practice Quiz

Financial Planner

Category - General Principles of Financial Planning

Start a Study Session Sign up for Question of the Day
The going concern concept is defined as:
  1. An accountant showing due diligence throughout the accounting cycle.
  2. An owner showing interest and concern for his business.
  3. An accounting concept in which preparing financial statements on a regular basis ensures that the company is in good standing.
  4. An accounting concept that assumes the business is not shutting down in the foreseeable future.
  5. An accounting concept in which the business will have regular audits.
Explanation
Answer: D - The going concern concept is an accounting concept that assumes the business is not shutting down in the foreseeable future and the financial statements are prepared in this manner.

Key Takeaway: The going concern principle in accounting is a concept in which the business is assumed to continue operating for the foreseeable future. Once it is declared that the business is no longer a going concern, a whole new set of accounting methods come into play.
Was this helpful? Upvote!
Login to contribute your own answer or details
Start a Study Session Sign up for Question of the Day

Top questions

Related questions

Most popular on PracticeQuiz