The Separate Entity Assumption Means

question 218

Multiple Choice

The separate entity assumption means:

• A)a company's financial statements reflect only the business activities of that company.
• B)each separate owner's finances must be revealed in the financial statements.
• C)each separate entity that has a claim on a company's assets must be shown in the financial statements.
• D)if the business is a sole proprietorship,the owners' personal activities are included in the company's financial statements.

---

Definitions:

Administrative Expenses

Costs associated with the general administration of a business, such as salaries of executive staff and office supplies.

Client-Visits

The act of meeting with clients or customers in person for business purposes, such as discussing projects, services, or sales.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate budgeting and variance analysis.

Food and Supplies

The materials and items used in the preparation of food or the provision of services, typically involving consumable goods.