Which of the following terms describes the presumption that a firm will remain in operation long enough to carry out its current plans, and will, in the normal course of its operations, realize changes in the fair values of its assets either by using those assets or selling them?
A)going concern
B)relevance
C)reliability
D)recognition
E)realization

Question

Quizplus · Accepted Answer

Going concern is the presumption that a firm will remain in operation long enough to carry out its current plans. This presumption is necessary for financial reporting because it allows the firm to measure and report changes in the fair value of its assets, either through use or sale, in the normal course of its operations. Relevance and reliability are also important accounting concepts, but they do not specifically relate to the going concern assumption. Recognition and realization are terms related to the measurement and recording of accounting transactions, but they do not address the assumption of continued operation.

Which of the Following Terms Describes the Presumption That a Firm