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Question

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.

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