Question

Discuss the going concern concept.

Answer 1

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 leads to the assumption that the business will not have to sell its assets any time soon and it will meet all its obligations as well.
So it justifies the financial statements as a part of a continuous series of statements. The current statements are tentative and only reflect the financial position of that particular period of time.