Which of the Following Factors Would Not Necessarily Contribute to a Going-Concern

question 46

Multiple Choice

Which of the following factors would not necessarily contribute to a going-concern problem?

• A)Excessive reliance on debt financing.
• B)Loss of key personnel without comparable replacement.
• C)Inadequate maintenance of long-lived assets.
• D)Declining profit margins.

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Definitions:

Process Costing

An accounting method used to allocate costs to units of product in processes where the products are indistinguishable from each other, such as in chemical processing or food production.

Conversion Costs

The total of direct labor costs plus manufacturing overhead costs, indicating the expenditures involved in transforming raw materials into completed products.

Materials Costs

The expense incurred for raw materials that are transformed into finished products in the manufacturing process.

Equivalent Units

A term in process costing used to convert partially completed units into a number of complete units for costing purposes.