Continuity of Life Refers to Whether an Entity Continues to Operate

question 57

True/False

Continuity of life refers to whether an entity continues to operate or technically dissolves and ceases to exist in its present form when a change occurs in the ownership structure.

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Definitions:

Non-Interest Bearing Note

A debt instrument that does not pay interest but is issued at a discount to its redemption value.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return, used to assess the worth of an investment.

Sales Returns

Sales returns are transactions where customers return previously purchased merchandise back to the seller, often due to defects or dissatisfaction, leading to a reversal of sale revenue.

Uncollectible Accounts

Accounts receivable that a company does not expect to collect and thus considers as a loss.