Final answer:
It is false that a violation of the going concern assumption would occur if a company is expected to operate for the foreseeable future. Such a violation actually indicates that the company's future operations are in doubt. Firms typically cease to exist when they cannot sustain profits.
Step-by-step explanation:
A violation of the going concern assumption is false if it is stated that such a violation would occur if a company is expected to operate for the foreseeable future. The going concern assumption is an accounting principle that assumes a company will continue to operate and not liquidate in the foreseeable future. If a company violates this assumption, it means that its ability to continue as a going concern is in doubt, often because it is facing financial difficulties or bankruptcy risks. This can indeed prevent a company from recognizing assets that represent future economic benefits, as it may be inappropriate to assume that the company will be able to realize those benefits.
Firms cease to exist typically because they are unable to earn lasting profits, which is the essential measure of business vitality. Without profits, it doesn't make sense for a business venture to continue, leading, eventually, to its closure. Given the importance of profits in determining a firm's longevity, assessing a firm's ability to operate as a going concern is a critical component of financial reporting and business analysis.