Which of the Following Factor Does Not Contribute to the Going-Concern

question 74

Multiple Choice

Which of the following factor does not contribute to the going-concern problem?

• A)excessive reliance on debt financing.
• B)loss of key personnel without comparable replacement.
• C)inadequate maintenance of long-lived assets.
• D)company following accounting rule peculiar to its industry.

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Definitions:

Variable Product Cost

Expenses that fluctuate in direct proportion to the amount of output produced, including direct labor and raw materials.

Fixed Costs

Expenses that do not change with the level of production or sales, including rent, salaries, and insurance, providing contrast to variable costs.

Operating Income

Earnings before interest and taxes (EBIT), calculated as gross income minus operating expenses, excluding non-operating income and expenses.

Variable Product Cost

Costs that vary directly with the level of production, such as materials and labor.