PRC-1 · Chapter 1 · Question 10 of 100
Unless there is an intention to liquidate the business, financial statements are prepared on the assumption that the enterprise will continue its operations for the foreseeable future. This is known as the:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Going concern basis
Explanation
The going concern concept assumes that a business will continue its operations indefinitely and has neither the intention nor the need to liquidate or materially curtail its scale of operations.
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