MrSwitch, a Local Business Man, Owns Two Different Businesses-A Lumber

question 79

Multiple Choice

Mr.Switch, a local business man, owns two different businesses-a lumber sawmill and a restaurant.The price of lumber has declined and therefore sawmill is in financial difficulty.However, the restaurant is thriving, and Mr.Switch would like to start paying two of the sawmill employees under the restaurant's payroll.His accountant explains that this is not in accordance with certain basic principles in accounting.Which principle is he referring to?

• A)Full disclosure
• B)Periodic-reporting assumption
• C)Entity concept
• D)Unit-of-measure assumption

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Definitions:

Welfare of Society

The overall health, happiness, and well-being of a community or civilization, often considered in economic and social policies.

Collusion

An agreement between parties, often secretly, to limit open competition by deceiving or defrauding others of their legal rights, or to obtain an objective forbidden by law typically by defrauding or gaining an unfair market advantage.

Fraudulent

Deliberately deceitful behavior intended to gain an unfair or unlawful advantage, which can encompass a wide range of activities including false representation and falsification of documents.

Deceitful

Characterized by dishonesty or manipulation to obscure the truth for personal or professional gain.