The accounting principle that requires financial statements to be prepared on the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the
A) historical cost principle
B) business entity principle
C) going concern principle.
D) currency principle
E) revenue recognition principle

Question

Quizplus · Accepted Answer

The going concern principle requires financial statements to be prepared based on the assumption that the business will continue to operate, with the expectation that it will generate enough cash to meet its obligations and pay its debts. This principle ensures that the financial statements provide useful information for users to make decisions and financial analysis.

The Accounting Principle That Requires Financial Statements to Be Prepared