ACCA AA · Chapter 12 · Question 4 of 9
Which of the following is an operating indicator, rather than a financial indicator, that may cast doubt on an entity's ability to continue as a going concern?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Loss of a key supplier with no alternative source of supply
Explanation
ISA 570 groups going concern indicators into financial, operating and other. Loss of key management, a major market, key customers, licences or principal suppliers are operating indicators. Net current liabilities, operating losses and inability to pay creditors are financial indicators.
More Subsequent events, going concern and written representations MCQs
- Q6At the year end, Fettle Co has current assets of $2.1 million and current liabilities of $3.0 million. Its overdraft facility is due for…
- Q7Under ISA 580, how should written representations be dated?
- Q8Management refuses to provide a written representation confirming that it has fulfilled its responsibility for preparing the financial…
- Q9Which of the following statements about written representations is correct?
- Q1Which of the following events occurring after the reporting period would normally be an adjusting event under IAS 10?