December 15 exam, Q3 Mercury Motors

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January 20, 2016 at 9:51 am #296547

Vicki
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Hi All

Although I passed my F8 exam I have concerns about Q3 Mercury Motors (this can be found on ACCA website)

The question clearly asks for indicators that the company is NOT a going concern, however upon reading the answer, all answer points indicate that the company IS a going concern?

I am extremely confused about this – can anyone clarify??

Thanks

Vicki

January 20, 2016 at 10:29 am #296561

Anonymous
Inactive

Hi,
It is the matter of understanding what is “going concern” mean. I also got it wrong before, so I think I can understand why you’ve been confused.

“Concern” is an old term for “Business”. So, “going concern” means “going business”. A going business is a healthy business and it can keep going, keep doing, keep performing or keep operating.
NOT “going concern” means the business is in danger of bankruptcy.

Basically, the question asks us to list the negative points of this business.

Hope that is clear enough.

Oh, by the way, I failed 35% but I thought I would score more than 70.
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