Emily Hogan Recently Opened a New Business

question 31

Multiple Choice

Emily Hogan recently opened a new business. The business has been very successful and as a reward for all her hard work Emily spent a day at the local spa. Emily paid for the spa using a company credit card and charged the amount to the expense account called Repairs and Maintenance expense. Emily's actions violated which of the following?

• A) the going concern assumption
• B) the monetary unit concept
• C) the historical cost measurement method
• D) the reporting entity concept

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Definitions:

Poker Hand

A combination of five cards that are ranked based on specific game rules used in the game of poker to determine the winner.

Recession Risk

The probability of an economy experiencing a period of negative growth, leading to a decrease in employment, income, and production.

Department Stores

Large retail establishments that offer a wide variety of goods divided into departments for shoppers.

Inferior Goods

Products whose demand decreases as consumer income rises, opposite to what is observed with normal goods.