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WAEC Financial Accounting 2011 Question 32

Question 32

Accounting Concepts and Conventions

The going concern concept assumes that

  1. A.every transaction is represented by a debit and credit entry
  2. B.the currency must not change
  3. C.the firm is a legal entity
  4. D.the business will continue to operate indefinitely
Show the answer and explanation

Answer: D (the business will continue to operate indefinitely)

Explanation

Going concern assumes the business will keep operating for the foreseeable future.