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What is the going concern assumption?

  1. A The business will be sold within twelve months
  2. B The business will continue operating for the foreseeable future
  3. C All assets are recorded at market value
  4. D Profits will grow every year
Answer

The business will continue operating for the foreseeable future

Going concern underpins historical cost accounting and the current versus non-current split. If it does not hold, assets must be measured on a break-up basis instead.

All Accounting MCQs

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