Which of the Following Would Violate the Economic Entity Concept

question 149

Multiple Choice

Which of the following would violate the economic entity concept?

• A) reporting amounts owed to the company's suppliers as a liability on the balance sheet.
• B) reporting equipment owned and used in the business as an asset in the balance sheet.
• C) reporting withdrawals by the owner as a drawing in the statement of owner's equity.
• D) reporting the owner's personal sailboat as an asset on the balance sheet.

---

Definitions:

Tax Imposed

A compulsory financial charge or some other type of levy placed upon a taxpayer by a governmental organization to fund government spending and various public expenditures.

Consumer Surplus

The gap between what a consumer is prepared to spend on a good or service and the price they actually end up paying.

Market Equilibrium

A condition or state in an economy where supply and demand are equal, leading to stable prices and quantities.

Units Bought

The quantity of a product that consumers purchase at a given price.