Which of the Following Conditions or Set of Circumstances Would

question 62

Multiple Choice

Which of the following conditions or set of circumstances would not ordinarily raise questions about the entity's ability to continue as a going concern:

• A) Default on a loan due in the previous year.
• B) Failure to meet forecasted earnings per share.
• C) Legal proceedings that may have a significant negative impact on the entity.
• D) Negative cash flow from operations for each of the last three years.

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Definitions:

Accretionary Prism

A prism- or wedge-shaped, structurally complex zone of faults, folds, and mostly metamorphosed rocks that form along the upper parts of a subduction zone; material derived from sediment contributed by adjacent volcanoes or a continent, along with oceanic crust scraped off the downgoing slab.

Oceanic Trench

Deep, narrow depressions in the ocean floor, often associated with subduction zones where one tectonic plate is diving beneath another.

Oceanic Crust

The part of Earth's crust that constitutes the ocean basins, thinner and denser than continental crust.

Values-Based Ethics

An approach to ethics that prioritizes values such as integrity and trustworthiness over rules and regulations in guiding moral behavior.