alleryStart learning →How does the value of a going concern compare with its breakup value?
AHigher, as it can keep earning profits
BAlways identical to its breakup value
CLower, as it carries more liabilities
DUnrelated to its breakup value
Answer & Solution
Correct answer: A. Higher, as it can keep earning profits
A going concern can continue to earn profits from its assets, so it is worth more than the break-up value of those assets.
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