Question 40
GCE_MODEL_QUESTIONS_VOL1
•
2025
•
FINANCIAL_ACCOUNTING
•
objective
State the ‘going concern' concept and explain one implication it has for the valuation of non‑current assets in financial statements.
Answer Options
A.
Going concern means the entity is expected to continue operating indefinitely; therefore non‑current assets are valued at fair market value rather than at cost less depreciation.
B.
Going concern means the entity is expected to continue operating indefinitely; therefore non‑current assets are not depreciated and are recorded at historical cost.
C.
Going concern means the entity will cease operations within a year; therefore non‑current assets are valued at their liquidation values rather than at cost.
Correct Answer
D.
Going concern means the entity is expected to continue operating indefinitely; therefore non‑current assets are valued at cost less depreciation rather than at liquidation values.
Correct Answer
D
Correct Option:
Going concern means the entity is expected to continue operating indefinitely; therefore non‑current assets are valued at cost less depreciation rather than at liquidation values.
About This Question
This is
Gce Model Questions Vol1
2025
Financial Accounting
Question 40.
It is one of the
objective
questions from the
2025
Gce Model Questions Vol1
Financial Accounting
examination.
Difficulty level:
Easy
.