Question

What does the going concern concept mean?

A)a business is profitable
B)a business will continue to operate for the foreseeable future
C) the assets of a business exceed its liabilities
D)the assets of a business should be evaluated at disposal value

Answer 1

B)a business will continue to operate for the foreseeable future

Step-by-step explanation:

The concept of 'going concern' means that a business will continue to operate into the foreseeable future. It implies that a business has a long life and is no danger of shutting down or being liquidated.

The going concern concept may be applied when a business is being sold or acquired. When a business is being sold as a going concern, it means that it is being sold as a unit. After the transaction, the business is expected to continue with its operations as normal.