Question

If the Going Concern concept is no longer valid, which of the following is true?

• A. All prepaid assets would be completely written-off immediately
• B. Total contributed capital and retained earning would remain unchanged
• C. Intangible assets would continue to be carried at net amortized historical cost
• D. Land held as an investment would be valued at its realizable value

Answer 1

The correct option is D Land held as an investment would be valued at its realizable value

Going Concern Concept assumes that the business will go on indefinitely. Due to this assumption, the whole asset is not charged to the profit and loss account. But if there is no such assumption then it implies that business may close at any time. Therefore, Land held as an investment would be valued at its realizable value