The Accounting Concept That Requires Every Business to Be Accounted

question 272

Multiple Choice

The accounting concept that requires every business to be accounted for separately from other business entities,including its owner or owners is known as the:

• A)Time-period assumption.
• B)Business entity assumption.
• C)Going-concern assumption.
• D)Revenue recognition principle.
• E)Measurement (Cost)principle.

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Definitions:

Marginal Cost

The uptick in price resulting from the manufacture of an extra unit of a good or service.

Monopoly Firm

A company that is the sole provider of a product or service in a market, facing no competition.

Profit

The financial gain obtained when the revenues generated from business activities exceed the expenses, taxes, and costs.

Profit Maximization

A method used by firms to determine the best output and price levels in order to achieve the highest profit.