The assumption that a business entity will not cease its operations in the near future refers to the concept of Going Concern.
Understand the Problem
The question is making a statement about the accounting principle that assumes a business will continue its operations indefinitely. It seems to be addressing a misunderstanding about the term associated with this assumption, which is not 'Consistency' but 'Going Concern'.
Answer
Going Concern
The final answer is Going Concern.
Answer for screen readers
The final answer is Going Concern.
More Information
The going concern assumption assesses whether a company has the necessary resources to continue operating in the foreseeable future. This assumption influences the preparation of financial statements, asset valuation, and auditing processes.
Tips
A common mistake is confusing the going concern assumption with other accounting concepts like consistency or conservatism. Ensure you understand the specific context and implications of each concept to avoid errors.
Sources
- CHAPTER 2 PROBLEM 2 TRUE OR FALSE 1 The assumption that a ... - coursehero.com
- What Does Going Concern Mean? - Investopedia - investopedia.com
- Going Concern Assumption | Accounting Concept + Examples - wallstreetprep.com
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