Practice Going Concern Concept - 15.3.3 | 15. Accounting Principles and Concepts | Management 1 (Organizational Behaviour/Finance & Accounting)
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Going Concern Concept

15.3.3 - Going Concern Concept

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Practice Questions

Test your understanding with targeted questions

Question 1 Easy

What does the Going Concern Concept assume about a business?

💡 Hint: Think about the future of the business.

Question 2 Easy

How does the Going Concern Concept affect asset valuation?

💡 Hint: Consider what happens when a business is about to shut down.

4 more questions available

Interactive Quizzes

Quick quizzes to reinforce your learning

Question 1

What does the Going Concern Concept assume?

The business will close soon
The business will continue indefinitely
Assets will be liquidated

💡 Hint: Think about how long the business is expected to operate.

Question 2

True or False: If a business is no longer considered a going concern, its assets should be valued at market prices.

True
False

💡 Hint: Consider what liquidation means.

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Challenge Problems

Push your limits with advanced challenges

Challenge 1 Hard

Analyze a case where Company A has a solid profit record but is facing increasing competition that threatens its market position. How should its management approach the Going Concern Concept?

💡 Hint: Consider what management should communicate to stakeholders.

Challenge 2 Hard

Create a financial summary for a fictional company that was once a going concern but is now facing liquidation due to debts. Discuss how their balance sheet would change.

💡 Hint: Focus on the disparities between traditional accounting and a liquidation scenario.

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