The accounting standards state that management is responsible to evaluate theâ€‹ entity's ability to continue as a going concern within one year after the date the financial statements are issued. True or False

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Arjun

Business

18 January, 07:32

The accounting standards state that management is responsible to evaluate theâ€‹ entity's ability to continue as a going concern within one year after the date the financial statements are issued. True or False

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Mariyah Baxter · Answer 1

True

Explanation:

The FASB's norms (FASB Accounting Standards Update No. 2014-15, August 2014) state that management is responsible for evaluating the conditions necessary for the company to continue operating and meeting its obligations within one year after the financial statements have been prepared.

Under the GAAP, management should continue to prepare financial statements as long as the company is able to operate until the company's liquidation is imminent. The going concern accounting principle states that the company will continue operating for the foreseeable future.