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

Question

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Choice "D" is correct. When assessing management's plans for dealing with the adverse effects of future conditions and events, mitigating factors would include: 1. The postponement of expenditures (including R&D). 2. Plans to dispose of assets. 3. Plans to borrow money or restructure debt. 4. Plans to increase ownership equity (sell stock). Choice "A" is incorrect. Discussions with lenders regarding terms would not be a mitigating factor. Actual agreements regarding restructuring of debt or amendments to covenants would be required. Choice "B" is incorrect. Strengthening internal controls over cash would not qualify as a management tactic to address going concern issues. Choice "C" is incorrect. Purchasing facilities which are currently being leased would only further decrease cash flow.

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