Multiple choice

The accounting measurement that is not consistent with the Going Concern concept is __________.

  1. historical cost

  2. realization

  3. the transaction approach

  4. liquidation value

  5. none of these

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Liquidation value is the value of the business when the business is wound up and is under liquidation whereas the going concern concept assumes that the business will continue over a long time and therefore the accounting measurement “Liquidation Value” is inconsistent with going concern concept.