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    Question

    Which of the following scenarios correctly reflects the

    going concern assumption?
    A Business liquidating assets due to insolvency Correct Answer Incorrect Answer
    B Business deferring loan repayment due to financial constraints Correct Answer Incorrect Answer
    C Business purchasing plant with a useful life of 10 years Correct Answer Incorrect Answer
    D Business facing a fraud-related loss Correct Answer Incorrect Answer

    Solution

    Going concern implies that the business will continue for foreseeable future, justifying long-term investment in assets.

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