Accounting · Going Concern Impact
Which of the following statements represents the most direct operational impact that the withdrawal of supplier credit has on an entity's assessment of the going concern basis of accounting?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1The lending bank will impose strict covenants on the overdraft facility, restricting operations
- 2The entity must find alternative suppliers who might fail to meet quality control standards
- 3Suppliers may end their relationship completely, preventing production and reducing sales volume
- 4The entity must pay cash on delivery, which adds immediate strain to existing cash flows and overdraft limits✓
Correct answer
The entity must pay cash on delivery, which adds immediate strain to existing cash flows and overdraft limits
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Accounting?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Going Concern Impact MCQs →Want more practice questions on Going Concern Impact?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Accounting · Going Concern Impact