Question 19
NECO
•
2023
•
FINANCIAL_ACCOUNTING
•
objective
State the "going concern" concept and explain one implication of this concept for the valuation of assets in financial statements.
Answer Options
A.
The going‑concern concept assumes the business will cease operations soon; therefore assets are valued at liquidation values rather than at cost less depreciation.
Correct Answer
B.
The going‑concern concept assumes the business will continue operating; therefore assets are valued at cost less depreciation, not at liquidation values.
C.
The going‑concern concept assumes the business will continue operating; therefore assets are valued at market fair value, not at cost less depreciation.
D.
The going‑concern concept assumes the business will continue operating; therefore assets are valued at liquidation values, not at cost less depreciation.
Correct Answer
B
Correct Option:
The going‑concern concept assumes the business will continue operating; therefore assets are valued at cost less depreciation, not at liquidation values.
About This Question
This is
Neco
2023
Financial Accounting
Question 19.
It is one of the
objective
questions from the
2023
Neco
Financial Accounting
examination.
Difficulty level:
Easy
.