The going concern assumption underlying the preparation of financial statements is also know as:
A) the continuity assumption
B) the matching principle
C) the prudence principle
D) the historical cost measurement basis

Question

Quizplus · Accepted Answer

The going concern assumption assumes that the company will continue to operate in the foreseeable future. This assumption underlies the preparation of financial statements, as it allows for the use of historical cost measurement, accrual accounting, and the matching principle. The other options listed are accounting principles, but they are not directly related to the going concern assumption.

The Going Concern Assumption Underlying the Preparation of Financial Statements