The Economic Entity Assumption States That Economic Events

question 232

Multiple Choice

The economic entity assumption states that economic events

• A) of different entities can be combined if all the entities are corporations.
• B) must be reported to the IASB.
• C) of a sole proprietorship cannot be distinguished from the personal economic events of its owners.
• D) of every entity can be separately identified and accounted for.

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Definitions:

FUTA

The Federal Unemployment Tax Act, a United States federal law that imposes a payroll tax on any business with employees for the purpose of funding state workforce agencies.

SUTA

State Unemployment Tax Act, which mandates employers to pay state unemployment taxes.

Temporary

Pertaining to an employee, position, or status that is intended for a limited time period, often with an end date in mind.

Permanent

Describes assets or records that are intended to be held or used on a long-term basis and not expected to be sold or otherwise converted into cash within a year.