GOING CONCERN Meaning and
Definition
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Going concern is a financial and accounting term that refers to the assumption that a business will continue its operations and remain solvent in the foreseeable future. The concept is primarily used when evaluating the financial statements and preparing financial reports, such as balance sheets and income statements.
In a going concern, it is assumed that the business will continue its ordinary course of operations, generate revenue, and meet its financial obligations. The assumption is based on several factors, including historical performance, industry trends, management's plans, and the ability to raise capital or obtain financing if necessary.
The going concern concept is crucial for a business as it impacts various financial decisions and assessments. Lenders and investors rely on this assumption to gauge the long-term viability and creditworthiness of a company when providing loans or making investment decisions. The ability of a business to continue as a going concern is also significant for employees, suppliers, and other stakeholders, as it signals a stable and sustainable future.
However, if there are significant uncertainties about a business's ability to continue as a going concern, it may result in a company's financial statements being prepared under a different framework, such as liquidation accounting. This occurs when there are doubts regarding the entity's ability to meet its financial obligations or the expectation that it will be unable to operate efficiently without substantial changes or financial assistance.
Common Misspellings for GOING CONCERN
- foing concern
- voing concern
- boing concern
- hoing concern
- yoing concern
- toing concern
- giing concern
- gking concern
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- gping concern
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- goung concern
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- goimg concern
Etymology of GOING CONCERN
The term "going concern" originated from the field of accounting and finance. The word "going" refers to the act or process of continuing, while "concern" refers to a business enterprise or company. The combination of both words signifies a business that is actively operating and expected to continue operating in the foreseeable future. The etymology of the individual words traces back to Middle English and Old French origins.
The word "going" can be traced back to the Old English word "gān", meaning "to go". Through various linguistic changes and influences, it evolved into the Middle English word "gon", which eventually became the modern English word "going".
On the other hand, the word "concern" has its origins in Old French. It derives from the word "concerner", meaning "to relate to" or "to belong to".
Idioms with the word GOING CONCERN
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a going concern
A business or organization that is currently operating and functioning successfully.
