Going Concern Concept

Q.

A firm is expected not to curtail its present scale and continue at least at the existing level under which of the following concept

1. Business entity concept

2. Going concern concept

3. Money measurement concept

4. Accounting period concept

Q.

A business was commenced on 1st January and it purchased 5 vehicles, each costing Rs 5, 000. During the year the business managed to sell 2 vehicles at the price of Rs 12, 000. The current market price of the vehicles is Rs 10, 000. How should the remaining 3 vehicles be valued if the business is going to continue its operations in the next year?

1. Rs 10, 000

2. Rs 5, 000

3. Rs 12, 000

4. None of the above

Q.

The concept that assumes that a business would survive for an infinite time is called 'Going concern'.

1. False

2. True

Q.

Explain the going concern concept.

Q.

The businessman always sees the business running for an indefinite period. What is this concept called?

1. Consistency

2. Accounting Period

3. Money Measurement

4. Going concern

Q.

Which inventory system lets a company know exactly how much of a product is in inventory at any point in time?

1. Periodic

2. Perpetual

3. GAAP

4. All of these

Q. The going concern concept assumes:

1. The entity will close its operations in 10 years
2. The entity can not be liquidated
3. The entity will continue running for a foreseeable future
4. The entity will continue running until the end of accounting period

Q.

Which principle covers that the company will continue for a long period of time?

1. Money measurement

2. Accounting period

3. Going concern

4. Debit

Q. If a machinery is purchased for Rs.1, 00, 000 the asset would be recorded in the books at Rs.1, 00, 000 even if its market value at that time happens to be Rs.1, 40, 000. In case a year after, the market value of this assets comes down to Rs.90, 000, it will ordinarily continue to be shown at Rs.1, 00, 000 and not at Rs.90, 000 due to _________________.

1. Realization concept
2. Present value concept
3. Cost concept
4. Money measurement concept

Q. Answer in one sentence only :

What is meaning of closing entry?

Q. ___assumption means neither any intention to close down the business, nor any necessity.

1. Going Concern
2. Accrual
3. Matching
4. Consistency