Question

What is the going concern assumption?

A. The viability of an entity to remain in business for the foreseeable future
B. The period of time required by the applicable financial reporting framework
C. The responsibility to perform any audit procedures
D. An overall conclusion on the audit drawn by auditors

Answer 1

The going concern assumption in accounting is the viability of an entity to remain in business for the foreseeable future. Option A is correct.

Step-by-step explanation:

The going concern assumption in accounting is the viability of an entity to remain in business for the foreseeable future. It is an important concept used to prepare financial statements. According to this assumption, it is presumed that the company will continue its operations and will not liquidate in the foreseeable future.

For example, when a company presents its financial statements, it assumes that it will continue to exist and operate in the next year and beyond. This assumption allows users of financial statements to make decisions based on the assumption of the company's continued existence.