The Economic Entity Assumption Requires That the Activities

question 180

Multiple Choice

The economic entity assumption requires that the activities

• A)of different entities can be combined if all the entities are corporations.
• B)must be reported to the Securities and Exchange Commission.
• C)of a sole proprietorship cannot be distinguished from the personal economic events of its owners.
• D)of an entity be kept separate from the activities of its owner.

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Definitions:

Profits

The financial gain made in a transaction or operation after all expenses are subtracted from revenue.

Licenses

Permits granted by an authority to an individual or organization to engage in a particular activity or occupation.

Intellectual Property

Legal rights that result from intellectual activity in the industrial, scientific, literary, and artistic fields.

Real Property

Land and anything permanently attached to it, like buildings, along with the rights associated with the ownership of land.