The Business Entity Principle

question 187

Multiple Choice

The business entity principle

• A) requires that sole proprietors have unlimited liability
• B) requires that partnership income be taxed at the partnership level
• C) means that business records should be kept separate from the owner's personal records
• D) requires that partnerships have written agreements
• E) requires that corporations have shareholders

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Definitions:

Bank Reconciliation

The process of matching and comparing figures from the accounting records against those shown on a bank statement to ensure consistency.

Days' Sales Uncollected

Days' sales uncollected is a financial metric that estimates the average number of days it takes for a company to collect payments from its credit sales, reflecting on the efficiency of its credit and collection policies.

Receivables

Amounts owed to a company by its customers for goods or services provided on credit.