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Which one of the following is not a key condition indicating doubt about a client's ability to continue as a going-concern?

a. Adverse key financial ratios.

b. Employee strike that halts operations for several months.

c. Company has not paid dividends to date.

d. Default on bank debt.

1 Answer

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Final answer:

The company not having paid dividends (option C) is not a key indicator of going-concern doubt as this is often a strategic business decision rather than a sign of financial distress.

Step-by-step explanation:

The question asks which of the following is not a key condition indicating doubt about a client's ability to continue as a going-concern. The conditions provided are adverse financial ratios, a significant labor disruption, the company not having paid dividends, and a default on bank debt. Out of these, the option that is typically not a direct indicator of going-concern doubt is (c) Company has not paid dividends to date. This is because paying dividends is a policy decision and many successful companies choose to reinvest profits rather than pay dividends.

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