n NISM Certifications
XV NISM Series XV
Medium

Which accounting concept assumes that a business will continue indefinitely?

Practice question from NISM XV Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Accrual concept

  2. Going concern concept

    Correct answer

  3. C

    Consistency concept

  4. D

    Prudence concept

Why this is the answer

The going concern concept assumes a business will continue operations indefinitely, which justifies deferring the recognition of certain expenses or revenues. Accrual relates to revenue/expense recognition, consistency to using same methods, and prudence to conservative valuation.

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