Davis, CPA, believes there is substantial doubt about the ability of Hill Co. to continue as a going concern for a reasonable period of time. In evaluating Hill's plans for dealing with the adverse effects of future conditions and events, Davis most likely would consider, as a mitigating factor, Hill's plans to:

Question

Quizplus · Accepted Answer

Choice "D" is correct. Negotiating reductions in required dividends would conserve cash, which would be a mitigating factor in Davis' concerns about Hill's ability to continue as a going concern. Choice "A" is incorrect. Accelerating R&D projects would use cash and impair the company's ability to continue as a going concern. Choice "B" is incorrect. Accumulating treasury stock would consume cash and aggravate the situation. Choice "C" is incorrect. Purchasing equipment that is currently leased would use cash and impair the company further.

Davis, CPA, Believes There Is Substantial Doubt About the Ability