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In accounting, "going concern" refers to a company's ability to continue functioning as a business entity. It is the responsibility of the directors to assess whether the going concern assumption is appropriate when preparing the financial statements. Financial statements are prepared on the assumption that the entity is a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the normal course of operations.
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What examples best describe the going concern concept?
what exmples best describe the going concern concept
What are the advantages of going concern?
adventage going to a concert
Is being a going concern a good or bad thing?
Being a going concern is generally considered a positive thing for a business. It means that the company is financially stable and able to continue operating in the foreseeable future.
Can the executor assume the mortgage of the deceased?
The executor must discuss that with the lender. If the executor is going to inherit the property the lender may agree to allow an assumption of the mortgage.
What is a sales assumption?
Sales assumption is an approximate figure of sales expected to occur in a particular time period.
What is going-concern Assumption?
Going concern is the assumption that the company will be around for the foreseeable future. If an auditor has a going concern issue, he/she may fear that the company will go bankrupt, etc.
Why is the going concern assumption an important consideration in understanding financial statement?
According to Going Concern Assumption it is assumed that the said business will continue in the foreseeable future and will not liquidate in future, This assumption ensures the faith of investors, potential investors, and all the stakeholders in the business. Thus the Financial Statement is prepared on the basis of Going Concern Assumption.
Which accounting assumption assumes that an enterprise will continue in operation long enough to carry?
going concern assumption
Which basic assumption may not be followed when a firm in bankruptcy reports financial results?
Going concern assumption.
What are the basic assumptions in accounting?
Economic Entity Assumption Going Concern Assumption Monetary Unit Periodicity(Time Period) Assumption
What is the rule that requires financial statements to reflect the assumption that a business will keep operating instead of being closed or sold?
Going concern assumption
Time period assumption states?
The time period assumption divides the economic life of a business into specific intervals that are used in reporting. see also: going concern assumption
What accounting concept justifies the usage of accruals and deferrals?
Going Concern Assumption
What is the impact of a company financial Statements if it is not prepared on the assumption that an enterprise is a going concern?
A going concern is an accounting assumption that states that a business will stay in operation for the foreseeable future. When the financial statements are not prepared for the annual report, it is the responsible of the Board of Directors must put this information into the footnotes to the financial statements and state any factors that may threaten that status. Further, the fact that the business is not a going concern means that it can not pay its liabilities and realize its assets. The company's auditor is responsible to the Board of Directors and must determine whether or not the company is still a going concern. The auditor is required to disclose any negative trends in the company's business operations. Negative trends would be lower operating income, loan denials, loan defaults, repossession of assets, and more. The auditor then must not issue a "going concern opinion." Investors may have second thoughts about holding the stock of the company if an auditor does not issue a going concern opinion in the annual report.
What is the only underlying assumption mentioned in the conceptual framework for financial reporting?
The only underlying assumption mentioned in the conceptual framework for financial reporting is the "going concern" assumption. This means that financial statements are prepared with the expectation that the entity will continue its operations for the foreseeable future, typically at least the next twelve months. This assumption is crucial as it influences the valuation of assets and liabilities and affects the overall presentation of financial statements.
Why is it necessary for accountants to assume that business entity will remain a going concern?
It is a basic assumption that the owners of the business would like to stay in the business. Hence Accountants prepare the books on the same premise.
What are the advantages of the going concern concept?
A going concern is a business that operates without the threat of liquidation. The advantages of going concern are that the business declares the intention of running for at least 12 months.
