Which of the following statement about going concern is correct? Select one: Sma

Question

Which of the following statement about going concern is correct? Select one: SmallCircle Liquidation value is used when the company will not continue in operation for the foreseeable future, that is, it is no longer a going concern. SmallCircle The reader of financial statements that have been prepared on the historical cost basis should be entitled to presume that the company in question is a going concern. SmallCircle The judgment that a company is a going concern, and should therefore use historical cost accounting, will turn out to be wrong if the company fails. SmallCircle All of the above statements are correct.

Explanation / Answer

Ans All of the above statements are correct. The Reader of financial statements prepared on the historical cost basis should be entitled to presume that the company in question is a going concern. This presumption is an important part of financial accounting, but every year it turns out to be wrong for some companies that unexpectedly fail.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.