A concept that a business enterprise will not be sold or liquidated in the near future is known as_______.
A
Going concern
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B
Economic entity
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C
Monetary unit
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D
None of these
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Solution
The correct option is A Going concern The concept of going concern assumes that a business firm would continue to
carry out its operations indefinitely, i.e. for a fairly long period of time and
would not be liquidated in the foreseeable future.
This is an important
assumption of accounting as it provides the very basis for showing the value
of assets in the balance sheet.