Question

Which of the following assumes that in the absence of contrary information a business entity will continue indefinitely?

1. Business failure assumption
2. Going concern assumption
3. Historical cost assumption
4. Liquidation assumption

Answer 1

The going concern assumption assumes that a business entity will continue indefinitely.

Step-by-step explanation:

The correct answer is option 2, Going concern assumption. The going concern assumption is an accounting principle that assumes a business entity will continue its operations indefinitely, unless there is evidence to the contrary. It means that the company is not expected to be liquidated or go out of business in the near future.