F2 - M2 - Going Concern

Question 1

An entity is considered to be a _______ if it is reasonably expected to remain in existence and settle all its obligations for the foreseeable future.

Answer 1

going concern

Question 2

Under U.S. GAAP, preparation of financial statements presumes that the reporting entity will continue as a ___________

Answer 2

going concern.

Question 3

Management is required to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern within ________ after the date that the financial statements are issued.

Answer 3

one year

Question 4

If conditions or events exist that raise substantial doubt about an entity’s ability to continue as a going concern, management should consider (2)

Answer 4

whether the entity’s plans intended to mitigate those conditions or if events will be successful in alleviating the substantial doubt.

Question 5

There are three going concern categories based on management’s evaluation, (3)

Answer 5

including no substantial doubt (disclosures not required); substantial doubt alleviated (requires footnotes disclosures); and substantial doubt not alleviated (requires footnote disclosures).

Question 6

If there is no substantial doubt is a disclosure required

Answer 6

No

Question 7

If there is substantial doubt alleviated

Answer 7

Footnote disclosure required

Question 8

if there is substantial doubt not alleviated

Answer 8

requires footnote disclosures

Question 9

U.S GAAP requires ________ if liquidation is imminent for Going concern.

Answer 9

liquidation basis of accounting

Question 10

IFRS stands on accounting basis if liquidation is imminent for Going concern.

Answer 10

No guidance on basis of accounting

Question 11

Going concern should be evaluated ______ years for GAAP

Answer 11

1 year

Question 12

Going concern should be evaluated ______ years for IFRS

Answer 12

At least 1 year