Question

Which accounting principle specifies that business will exist for an indefinite period of time?

Options

• The Money measurement principle

• The Business entity principle

• The Dual aspect principle

• The Going concern principle

Answer 1

The Going concern principle

Explanation:

The going concern principle is a fundamental accounting assumption that a business will continue to operate indefinitely. It assumes that the company has no plan or need to liquidate or drastically reduce its scale of operations in the near future. This enables accountants to defer the recording of certain expenses (such as fixed assets) to future periods using depreciation.