The going concern assumption implies that:
A) a firm will continue to be in business for the foreseeable future.
B) a firm will be going out of business in the near future.
C) a firm will continue to operate in the near future, but only after being acquired by another firm.
D) None of the above.

Question

Quizplus · Accepted Answer

The going concern assumption assumes that a firm will continue its operations for the foreseeable future, meaning it will not be going out of business in the near future. This assumption is important for financial reporting as it allows for assets and liabilities to be valued based on their ongoing usefulness and not just their current market value.

The Going Concern Assumption Implies That