Analytical Procedures During Risk Assessment of a Going Concern _______

question 30

Multiple Choice

Analytical procedures during risk assessment of a going concern _______.

• A)May identify negative trends such as working capital deficiencies, adverse key financial ratios, and decreasing cash flow from operations
• B)May identify positive trends such as working capital deficiencies, adverse key financial ratios, and decreasing cash flow from operations
• C)May identify only external matters that have occurred such as loss of a key franchise, loss of a principal customer, or work stoppages due to natural disaster
• D)May identify internal matters that have occurred such as legal proceedings

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Definitions:

Liquid Resource

Assets that can be quickly and easily converted into cash without significant loss in value.

Inventory

the raw materials, work-in-process products, and finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.

Solvency Ratios

Solvency Ratios measure a company's ability to meet its long-term debts and financial obligations, indicating its financial health.

Maturing Obligations

Short-term debts or obligations that are nearing their due date and need to be repaid or refinanced.