This leads to the assumption that the business will not have to sell its assets any time soon and it will meet all its obligations as well
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This leads to the assumption that the business will not have to sell its assets any time soon and it will meet all its obligations as well
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- Which of the following concepts states that a business will continue its operations for the foreseeable future and the company will not be forced to liquidate in the near future? a. Accrual basis b. Materiality c. Consistency concept d. Going concernWhich of these best explains fixed assets? a. Are expensive items bought for the business b. Are bought to be used in the business c. Are of long life and are not purchased specifically for resale d. Are items which will not wear out quicklyThe business will continue in existence and will not be liquidated. This concept is: Select one: a. Going Concern b. Conservation c. Realization d. Money Measurement
- Sometimes, for the fixed assets of certain businesses, the balance in Accumulated Depreciation is equal to the cost of the asset. a. Can one record additional depreciation on the assets if the assets are still useful to the business? b. Why? Explain: c. Also, when can such a business make an entry to remove the cost and accumulated depreciation of the fixed assets from the account?Give an example of business transactions that would: Cause one asset to increase and another asset to decrease, with no effect on either liabilities or owners equity. Cause both total assets and liabilities to increase with no effect on owners'Present an argument to support the idea that your company’s land should not be depreciated, even though the property on the land is depreciated? Using practical example describe how International Accounting Standard 40 would apply to Assets in your company? Depreciation does not involve movement of cash, therefore unnecessary in accounting for an entity’s performance, Discuss?
- Identify if it will Increase, Decrease or No effect. 1.What will happen to the company’s liquidity when some of its products are sold from inventory? 2.What happens to the owner’s assets when the company purchases equipment with its cash? 3.What happens to the owner’s assets when the company repays the bank that had lent?According to the textbook, the definition of asset is "asset are resources that are controlled by a business from which the economic benefits are expected to flow to the business.", the definition of liabilities are "they represents negative future cash flow for the enterprise."But asset included liabilities, isn' t that contradict the definition of asset?A business returns damaged goods which it had previously purchased on credit to the supplier. The effect of this transaction would be to: Decrease capital and decrease assets Decrease assets and decrease liabilities Increase capital and decrease assets Increase assets and increase liabilities
- Under standard accounting rules, it is possible for a company’s liabilities to exceed its assets. When this occurs,the owners’ equity is negative. Can this happen with market values? Why or why not?Which among the following options would help to improve the liquidity position of the business? a. Prompt payment of wages b. Reduction in the credit period allowed by the suppliers c. Prompt payment of day to day expenses d. Reduction in the credit period allowed to the customersWhat assumption states that a business is able to financially continue operations and is not planning to liquidate? A. Going concern B. Periodicity C. Full disclosure D. Monetary unit