Question

State the case where the going concern concept is applied?

• A. When an enterprise was set up for a particular purpose, which has been achieved , or to be achieved shortly
• B. When a receiver or liquidator has been appointed in case of as a company which is to be liquidated
• C. Fixed assets are acquired for use in the business for earning revenues and are not meant for resale
• D. When an enterprise is declared sick

Answer 1

Answer: (C)

Fixed assets are acquired for use in the business for earning revenues and are not meant for resale

Going Concern Concept states that the operations of the business will continue and will not stop in near future.
It means that the business has no intention to liquidate in near future.
Due to this concept, Fixed assets are acquired for use in the business for earning revenues and are not meant for resale.