The Business Entity Concept Means That

question 72

Multiple Choice

The business entity concept means that

• A) the owner is part of the business entity
• B) an entity is organized according to state or federal statutes
• C) an entity is organized according to the rules set by the FASB
• D) the entity is an individual economic unit for which data are recorded, analyzed, and reported

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Definitions:

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, demonstrating its financial position.

Descriptive Statement

A statement providing detailed information or explanations about a subject to convey understanding or clarify meaning.

Financial Statements

Consolidated reports created from a company's accounting data, including the balance sheet, income statement, and cash flow statement, used to communicate the financial performance and condition of the company.

Reporting Period

The specific span of time covered by financial statements, typically a fiscal quarter or year, over which a company reports its financial performance.