Going concern in financial management, Financial Management

Assignment Help:

Going Concern in Financial Management

Going concern means in which business activities will continue for a fairly long period of time unless and until the business has entered into a procedure of liquidation.  This concept does not mean in which the business will continue for an infinite period of time, but it denotes in which the business is going to run for fairly long period of time so as to carry out business plans.

Under this concept it is assumed in which the business activities will continue for at least a period of time essential to meet its present contractual obligations and recover the original cost of its fixed assets.  This concept denotes in which the assets are obtains for utilization and not for resale. Under this concept utilization of resources for producing excellence and realization of revenue through their sale assumes significance.  Income is determined after charging cost of utilised resources to the revenue of that period.  Revenue and costs are recognized as and while they are earned or incurred and recorded in the financial statement of the period that they relate to.  This denotes that valuation of the business is completed on the basis of earning power rather than on the primary of the liquidation price of the enterprise.  This concept justifies for revenue realisation.  The revenue would be deemed to be realized along with the transfer of ownership of goods or services rendered.  Goods could be sold for cash or credit, thus earning of revenue is hard from cash collection from customers.


Related Discussions:- Going concern in financial management

#titApplicability of an operating cycle, Discuss the applicability of an op...

Discuss the applicability of an operating cycle in cabbage growing business in Uganda.

Advantages of just-in-time inventory management, Q. Advantages of Just-in-t...

Q. Advantages of Just-in-time inventory management? JIT inventory management methods look for eliminate waste at all stages of the manufacturing process by minimising or elimin

Differentiate between systematic and unsystematic risk, QUESTION a) Dis...

QUESTION a) Discuss the importance of diversification in the context of stock markets using appropriate numerical illustrations. b) Mimine and Minush are two companies with

Why firms need funds at certain episodic events, Why firms need funds at ce...

Why firms need funds at certain episodic events A related aspect was that firms need funds at certain episodic events like merger, reorganization, liquidation and soon. A detai

Objectives and functions of asic, Objectives and Functions of ASIC The ...

Objectives and Functions of ASIC The objective of ASIC is to ensure the confident and informed participation of consumers in the financial system. To attain this objective, it

Working capital, discuss the applicability of an operating cycle considerin...

discuss the applicability of an operating cycle considering broilers?

Treasury inflation-protected securities or tips, Treasury Inflation-P...

Treasury Inflation-Protected Securities (TIPS) are the inflation-indexed bonds, the US Treasury offers. The first offer was made in the year 1997. As the name sug

State the concept of icq, ICQ's designed to: Identify possible area...

ICQ's designed to: Identify possible areas of weakness. Discover existence of internal controls. Questions are framed to highlight situations where: NO su

Meaning of working capital, Problem 1 What are the characteristics of s...

Problem 1 What are the characteristics of small business? Describe the various forms of organisation under which small business operate. Characteristics List the vari

Explain contingent exposure, Explain contingent exposure and define the adv...

Explain contingent exposure and define the advantages of using currency options to manage this type of currency exposure. Answer: Companies may come across a state where they m

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd