Question

According to Generally Accepted Accounting Principles (GAAP), to meet the ""going-concern"" standard an entity must be viewed as capable of staying in business for ____________ after the date of the financial statements.

A. A reasonable period of time.
B. Six months.
C. Nine months.
D. Two years.

Answer 1

GAAP's "going-concern" standard requires an entity to likely remain in business for a reasonable period, generally interpreted as at least one year from the financial statements' date. So, the correct answer is option a.

Step-by-step explanation:

According to Generally Accepted Accounting Principles (GAAP), to meet the "going-concern" standard, an entity must be viewed as capable of staying in business for a reasonable period of time after the date of the financial statements. The correct answer to this question is A. A reasonable period of time.

While GAAP does not specify a precise timeframe for what constitutes a 'reasonable period', it is generally interpreted to be at least one year from the date the financial statements are issued or are available to be issued.