Which of the following is not an example of a mitigating factor that reduces the risk that thegoing concern assumption may be in doubt?a. The ability to raise additional funds via borrowingsb. A letter of guarantee from a parent companyc. The ability to sell an unprofitable segment of the businessd. Significant rapid increase in competition

As per AS 2415: Consideration of an entity's ability to continue as a going concern, if auditor find…

Answered: Which of the following is not an…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

Examples of systematic risk include a new competitor in the marketplace with the potential to take significant market share from the company invested in, a regulatory change(which could drive down company sales), a shift in management, or a product TRUE OR FALSE?
The term Capital forbearance refers to: a. Capital injected by the shareholders of a FI for expansion. b. Freezing of the undistributed capital of an FI by the regulators. c. Regulators’ policy of allowing an FI to continue operating even when its capital funds are fully depleted. d. Mandatory actions that have to be taken by regulators as a DI’s capital ratio falls
Seeking to maximise the current year’s profit is not a sensible objective for most businesses for several reasons. Which is the only one of the following that is not such a reason? Group of answer choices It can be achieved by increasing the number of shareholders. It ignores wealth generation. It ignores risk. It ignores longer term profitability.
What types of firms would we expect to observe higher direct agency costs of equity, such as consuming excessive perquisites by management ? Question 7 options: a) Firms with high free cash flows b) Firms with fewer growth opportunities c) Firms with weak governance structures d) All of the above options are correct e) None of the options are correct
When close to the zone of insolvency, managers have an incentive to gamble. This is known as Question options: a) an agency cost of debt that covenants cannot attenuate b) an agency cost of equity known as fraudulent conveyance c) an agency cost of debt that negative covenants can attenuate d) an agency cost of debt that positive covenants can attenuate
What informal remedies are available to firmsin financial distress? In answering this question,define the following terms:(4) Composition
Which of the following limits the market from becoming a fully efficient market? New information takes time to process. Obtaining new information is costly. The existence of closed end investment companies. Both a. and b. are correct. All of the above answers are correct. None of the above answers is correct.
Which of the follwing is not correct about goals of finance function Select one: a. Improper utilisation of funds b. Acquiring Sufficient and Suitable Funds c. Maximising Firm’s Value d. Increasing Profitability
Real options reflect the management's ability to adopt and later revise corporate investment decisions. Select one: True False Any strategic transaction can unlock additional values for both parties involved in the transaction, these additional benefits can't be accessed by each party separately. Select one: True False Book values do not mirror actual market values for manufacturing companies, but they may be more accurate for distribution firms. Select one: True False When a company invites other companies to acquire its business, its considered as a friendly acquisition.
debt can bo soon as a remedy for agency costs and -problems, and therefore create value in companies. However, in certain circumstances debt can also be responsible for aggravating agency problems, and load to value destruction in companies. Please explain and discuss this statement.
The company’s usage of the Baumol model in cash management involves trade-off. A decrease in the optimal transaction size would more likely result from a. Increase of return on marketable securities b. None of the choices is correct c. Increase in the annual demand for cash d. Decrease of debt to asset ratio

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