The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future. To find: The description of continuity by Sprouse and Moonitz.

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Answer 1

Question

Chapter 2, Problem 2.4C

(a)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find:The description of continuity by Sprouse and Moonitz.

(b)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find:Whether historical cost of company’s assets is relevant while planning to buy a business. Also, determine the asset values that would be relevant to the decision of investment.

(c)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find: Whether continuity is presumed when company is bankrupt and plans to liquidate its assets. Also, determine the impact of lack of continuity on measurement of assets.

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Answer 2

Question

Chapter 2, Problem 2.4C

(a)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find:The description of continuity by Sprouse and Moonitz.

(b)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find:Whether historical cost of company’s assets is relevant while planning to buy a business. Also, determine the asset values that would be relevant to the decision of investment.

(c)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find: Whether continuity is presumed when company is bankrupt and plans to liquidate its assets. Also, determine the impact of lack of continuity on measurement of assets.

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Answer 3

Question

Chapter 2, Problem 2.4C

(a)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find:The description of continuity by Sprouse and Moonitz.

(b)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find:Whether historical cost of company’s assets is relevant while planning to buy a business. Also, determine the asset values that would be relevant to the decision of investment.

(c)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find: Whether continuity is presumed when company is bankrupt and plans to liquidate its assets. Also, determine the impact of lack of continuity on measurement of assets.

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Answer 4

Question

Chapter 2, Problem 2.4C

(a)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find:The description of continuity by Sprouse and Moonitz.

(b)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find:Whether historical cost of company’s assets is relevant while planning to buy a business. Also, determine the asset values that would be relevant to the decision of investment.

(c)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find: Whether continuity is presumed when company is bankrupt and plans to liquidate its assets. Also, determine the impact of lack of continuity on measurement of assets.

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Answer 5

Chapter 2, Problem 2.4C

(a)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find:The description of continuity by Sprouse and Moonitz.

(b)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find:Whether historical cost of company’s assets is relevant while planning to buy a business. Also, determine the asset values that would be relevant to the decision of investment.

(c)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find: Whether continuity is presumed when company is bankrupt and plans to liquidate its assets. Also, determine the impact of lack of continuity on measurement of assets.

Answer 6

Chapter 2, Problem 2.4C

(a)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find:The description of continuity by Sprouse and Moonitz.

Answer 7

Chapter 2, Problem 2.4C

(a)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find:The description of continuity by Sprouse and Moonitz.

Answer 8

(b)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find:Whether historical cost of company’s assets is relevant while planning to buy a business. Also, determine the asset values that would be relevant to the decision of investment.

Answer 9

(b)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find:Whether historical cost of company’s assets is relevant while planning to buy a business. Also, determine the asset values that would be relevant to the decision of investment.

Answer 10

(c)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find: Whether continuity is presumed when company is bankrupt and plans to liquidate its assets. Also, determine the impact of lack of continuity on measurement of assets.

Answer 11

(c)

To determine

Introduction: The going concern concept indicates that the company will continue its operations for an indefinite period and will not liquidate in the early future. As per the accounting principles, company is considered as a going concern when there is no evidence to believe that it will cease its operations in near future.

To find: Whether continuity is presumed when company is bankrupt and plans to liquidate its assets. Also, determine the impact of lack of continuity on measurement of assets.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 2 - Prob. 2.1C Ch. 2 - Prob. 2.2C Ch. 2 - Prob. 2.3C Ch. 2 - Prob. 2.4C Ch. 2 - Prob. 2.5C Ch. 2 - Prob. 2.6C Ch. 2 - Prob. 2.7C

Solution Summary: The author explains the concept of continuity by Sprouse and Moonitz. The company is considered a going concern when there is no evidence that it will cease its operations in near future.

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