The going concern assumption supports the reporting of plant assets at undepreciated cost (book value) rather than market value.

Question

Quizplus · Accepted Answer

The going concern assumption assumes that the business will continue operating in the future, and as such, it supports the reporting of plant assets at their undepreciated cost or book value rather than market value. This is because the market value of assets may fluctuate based on various external factors, but the book value represents the value of the asset at the time of acquisition, which is a more reliable representation of the company's financial health.

The Going Concern Assumption Supports the Reporting of Plant Assets