The Continuity (Going-Concern)assumption of Accounting

question 53

Multiple Choice

The continuity (going-concern) assumption of accounting:

• A)enables accountants to ignore the effect of inflation in the accounting records.
• B)holds that the entity will remain in operation long enough to use its existing assets.
• C)maintains that each organization, or section of an organization, stands apart from other organizations and individuals.
• D)ensures that accounting records and statements are based on the most reliable data available.

Calculate ending inventory levels based on sales budget projections.

Prepare a sales budget incorporating inventory considerations.

Understand the importance of maintaining inventory buffer for production components.

Calculate the quantity of production components needed based on production budgeting.

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Definitions:

Average Product

The output produced per unit of input used; calculated by dividing the total product by the quantity of inputs.

Yards Raked

The total area of yards cleared of leaves or debris, serving as an indicator of performed maintenance or service activity.

Average Product

The output produced per unit of input, calculated by dividing total product by the quantity of input used in its production.

Labor

The human effort, both physical and mental, used in the production of goods and services.