If It Becomes Apparent to an Entity That New Events

question 50

Multiple Choice

If it becomes apparent to an entity that new events or conditions have resulted that indicate that the entity is no longer a going concern,the entity must:

• A) treat this as a non-adjusting event and discloses the reason for the breach of the going concern assumption.
• B) treat this as an adjusting event and adjust the affected accounts in the financial report.
• C) prepare its financial report on a going concern basis and ask the auditor to indicate in the opinion the breach of the going concern basis.
• D) prepare the financial reports adopting a fundamental change in the basis of accounting, say use of liquidation values instead of modified historical cost basis.

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Definitions:

Beak Size

A morphological trait in birds and some other animals, influencing their feeding habits and ecological niche, often subject to evolutionary adaptation.

Hindlimbs

The rear limbs of an animal, especially those on the vertebrates, used for locomotion or support.

High Altitude

Pertains to areas that are significantly elevated above sea level, affecting oxygen levels and often requiring physiological adaptation for survival.

Mammary Glands

Specialized organs in mammals that produce milk to nourish newborns, a key characteristic of mammalian species.