Which Assumption Is the Basis Upon Which the Personal Assets

question 43

Multiple Choice

Which assumption is the basis upon which the personal assets of the owner are excluded from the business's balance sheet?

• A) Going concern
• B) Accrual basis
• C) Materiality
• D) Accounting entity

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Definitions:

Work in Process

Inventory that includes goods that are in the process of being manufactured but are not yet completed.

Raw Materials Inventory

Items acquired for the purpose of processing into finished goods.

Finished Goods

Products that have completed the manufacturing process but have not yet been sold to customers.

LIFO Inventory Method

An inventory valuation method that assumes the last items placed in inventory are the first sold during an accounting period; stands for Last-In, First-Out.