The Going Concern Assumption

question 271

Multiple Choice

The going concern assumption:

• A) Means that we can express transactions and events in monetary, or money, units.
• B) Means that a business is accounted for separately from other business entities, including its owner.
• C) Presumes that the life of a company can be divided into time periods, such as months and years, and that useful reports can be prepared for those periods.
• D) Prescribes that a company record the expenses it incurred to generate the revenue reported.
• E) Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

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Definitions:

Geographical Sales Organization

A sales strategy that divides an organization's market based on geographical locations to better cater to customer needs.

Travel Time

The duration required to move from one location to another, often considered in planning and logistics.

Selling Effort

The amount of time and energy dedicated by a sales team to promote and sell a product or service.

Break-Even Chart

A graphic presentation of the break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold.