Which of the following factors would not necessarily contribute to a going-concern problem?
A)Excessive reliance on debt financing.
B)Loss of key personnel without comparable replacement.
C)Inadequate maintenance of long-lived assets.
D)Declining profit margins.

Question

Quizplus · Accepted Answer

Declining profit margins may not necessarily contribute to a going-concern problem as the company may still have sufficient assets and cash flow to continue operating even with reduced profits. However, the other factors listed (excessive debt financing, loss of key personnel without replacement, inadequate maintenance of assets) are all potential indicators of a going-concern problem.

Which of the Following Factors Would Not Necessarily Contribute to a Going-Concern