Question

The going concern concept assumes that _______________.

• A. the entity will continue running for foreseeable future.
• B. the entity will continue running until the end of accounting period.
• C. the entity will close its operations in 10 years.
• D. the entity can't be liquidated.

Answer 1

The correct option is A the entity will continue running for foreseeable future.

The going concern principle is the assumption that an entity will remain in business for the foreseable future. Conversely, this means the entity will not be forced to halt operations and liquidate its assets in the near term at what may be very low fire-sale prices.