The Economic Entity Assumption

question 10

Multiple Choice

The economic entity assumption

• A) is inapplicable to unincorporated businesses.
• B) recognizes the legal aspects of business organizations.
• C) requires periodic income measurement.
• D) is applicable to all forms of business organizations.

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Definitions:

Land And Buildings

Assets categorization in accounting, where land refers to the cost of land owned by a company and buildings to the cost of structures situated on the land.

Source Documents

Original records and documents that provide evidence of financial transactions and are the foundation for recording entries in the business’s accounting system.

Sales Receipts

Documents that evidence the sale of goods or services and the payment received for those sales.

Bank Statements

Monthly or quarterly documents issued by a bank detailing all transactions in a customer's account.