Question Details

Which of the following is an implication of the going concern assumption 



1.	The economic entity assumption
a.	is inapplicable to unincorporated businesses.
b.	recognizes the legal aspects of business organizations.
c.	requires periodic income measurement.
d.	is applicable to all forms of business organizations.
2.	Preparation of consolidated financial statements when a parent-subsidiary relationship exists is an example of the
a.	economic entity assumption.
b.	relevance characteristic.
c.	comparability characteristic.
d.	neutrality characteristic.
	3.	During the lifetime of an entity, accountants produce financial statements at arbitrary points in time in accordance with which basic accounting concept?
a.	Cost/benefit constraint
b.	Periodicity assumption
c.	Materiality constraint
d.	Expense recognition principle
	4.	The assumption that a business enterprise will not be sold or liquidated in the near future is known as the
a.	economic entity assumption.
b.	monetary unit assumption.
c.	materiality assumption.
d.	none of these.
	5.	Which of the following is an implication of the going concern assumption ?
a.	The historical cost principle is credible.
b.	Depreciation and amortization policies are justifiable and appropriate.
c.	The current-noncurrent classification of assets and liabilities is justifiable and signify-cant.
d.	All of these.




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