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:

Double Fertilization

Fertilization as it occurs in flowering plants; one sperm cell fuses with an egg, and a second sperm cell fuses with the endosperm mother cell.

Zygote

The cell formed by the fusion of two gametes; the earliest stage of embryonic development in sexually reproducing organisms.

Endosperm

A tissue produced inside the seeds of most flowering plants following fertilization, which acts as a food store for the developing embryo.

Oxidative Tissue Damage

Tissue impairment caused by reactive oxygen species leading to cellular dysfunction and disease.