The correct answer is: A. Going concern
A going concern is a business that is expected to continue operating for the foreseeable future. This concept is important in accounting because it allows businesses to use historical financial information to make projections about future performance.
Gross working capital is a measure of a company’s liquidity. It is calculated by taking the current assets of a company and subtracting its current liabilities. A high level of gross working capital indicates that a company has a lot of cash on hand and is able to meet its short-term obligations.
The going concern concept is important in accounting because it allows businesses to use historical financial information to make projections about future performance. If a business is not expected to continue operating for the foreseeable future, then its historical financial information may not be relevant for making projections about future performance.
The other options are incorrect because they do not relate to the going concern concept.
- Option B, money measurement, is a concept that states that financial statements should be prepared using monetary units.
- Option C, revenue concept, is a concept that states that revenue should be recognized when it is earned.
- Option D, cost concept, is a concept that states that assets should be recorded at their historical cost.