The Accounting Assumption That a Business Will Continue to Operate

question 42

Multiple Choice

The accounting assumption that a business will continue to operate into the foreseeable future is the:

• A)entity assumption.
• B)going concern assumption.
• C)accounting period assumption.
• D)historical cost assumption.

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Definitions:

Protective Tariffs

Import taxes imposed by a country on foreign goods to protect domestic industries from competition by making imported goods more expensive.

Comparative Advantage

The capacity of an entity to generate a product or service with a lesser opportunity cost compared to others.

Protectionist Argument

The rationale for implementing trade barriers, such as tariffs and quotas, to protect domestic industries from foreign competition.

Dumping

Selling goods in a foreign market at a price below the cost of production or below the price in the home market, often to gain market share.