Which Basic Assumption May NOT Be Followed When a Firm

question 15

Multiple Choice

Which basic assumption may NOT be followed when a firm in bankruptcy reports financial results?

• A) economic entity assumption
• B) going concern assumption
• C) periodicity assumption
• D) monetary unit assumption

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Definitions:

Sound Argument

An argument that is both valid (correctly structured) and has all true premises.

Sound Argument

An argument that is both valid (correctly structured) and has true premises, leading to a true conclusion.

Valid

An argument based on deduction that is structured in a way that, if the premises are considered true, then the conclusion necessarily follows as true.

False Premise

A logical fallacy where an argument is built on a statement that is assumed to be true but is actually false, misleading, or unfounded.