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QUESTION 50 Per the FASB conceptual framework, the absence of information to the contrary that a...

QUESTION 50

  1. Per the FASB conceptual framework, the absence of information to the contrary that a business will operate indefinitely is the:

    A.

    Historical cost assumption.
    B.

    Entity assumption.
    C.

    Going concern assumption.
    D.

    Periodicity assumption.
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Answer #1

Option C - Going concern assumption.

The absence of information to the contrary that a business will operate indefinitely is the "Going concern assumption".

If nothing is mentioned, then as per FASB and also as per GAAP, a business entity is always having going concern assumption in the objects of any information to the contrary i e.

"Business concern is having indefinite life period"

And also needs to prepare their books of accounts on going concern basis.

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