The Going Concern Assumption Is Not Applied to

question 95

Multiple Choice

The going concern assumption is not applied to

• A) companies that have sustained losses for the previous two years.
• B) companies about to file for bankruptcy.
• C) the partnership form of business.
• D) companies that have been in existence for less than a year.

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Definitions:

Capital Owners

Individuals or entities that own assets with economic value expected to benefit future operations, such as machinery, buildings, or equipment.

Government Failure

A situation where government interventions in the economy cause more harm than good, often due to inefficiencies, misallocation of resources, or unintended consequences.

Water Pollution

Contamination of water bodies such as rivers, lakes, oceans, and groundwater due to harmful substances, leading to detrimental effects on aquatic life and human health.

Standard of Living

The level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area.