According to the going concern principle, how is the business life treated?

The going concern principle is a foundational concept in accounting that assumes a business will continue its operations into the foreseeable future unless there is evidence to the contrary. This principle allows businesses to prepare their financial statements under the assumption that they can settle their obligations and continue their activities without the need for liquidation.

By treating the business life as continuous and ongoing, the going concern principle ensures that assets and liabilities are valued based on their current utilization and future potential, rather than their immediate liquidation value. This perspective affects various financial reporting practices, such as the recognition of revenue and the depreciation of assets, allowing for a more accurate representation of a company's financial health and operational stability. This understanding influences stakeholders' decisions, as they rely on the assumption that the entity will remain viable for the long term.