If it becomes apparent to an entity that new events or conditions have resulted that indicate that the entity is no longer a going concern,the entity must:
A) treat this as a non-adjusting event and discloses the reason for the breach of the going concern assumption.
B) treat this as an adjusting event and adjust the affected accounts in the financial report.
C) must prepare its financial report on a going concern basis and ask the auditor to indicate in the opinion the breach of the going concern basis.
D) must prepare the financial reports adopting a fundamental change in the basis of accounting, say use of liquidation values instead of modified historical cost basis.
E) None of the given answers.

Question

Quizplus · Accepted Answer

If an entity is no longer a going concern, it must prepare its financial statements on a basis other than going concern, such as using liquidation values.

If It Becomes Apparent to an Entity That New Events