Final answer:
The statement is false.
The separate entity assumption refers to treating a business as distinct from its owners, which is separate from the going concern assumption that suggests a business will operate indefinitely.
Step-by-step explanation:
The statement is false. The separate entity assumption in accounting refers to treating a business as distinct from its owner or owners. However, what you're describing sounds more akin to the going concern assumption. The going concern assumption implies that a business entity will continue to operate indefinitely, or at least for the foreseeable future, without the intention or necessity of liquidation.
The assumption you are referring to is a fundamental concept in financial reporting that impacts how financial statements are prepared and interpreted. Meanwhile, the separate entity assumption simply means that the company's financial transactions are recorded separately from the personal affairs of its owners.