please explain your understanding of the"going concern or continuity of activity convention".?

Question

thanks~

Answer 1

The concept of going concern relates to the continuation of the business into the future. Going concern assumes that the business not only wants to conduct business today, but that it also wants to be around to do business in future period. If there is doubt about whether a company will be able to financially manage this, there is often a going concern clause placed in their financial statements, reflecting the possibility that they will not be around in the future.