Which of the Following Assumptions Implies That the Assets and Liabilities

question 90

Multiple Choice

Which of the following assumptions implies that the assets and liabilities of the business are accounted for separately from the assets and liabilities of the owners?

• A)Monetary unit assumption.
• B)Continuity assumption.
• C)Historical cost principle.
• D)Separate entity assumption.

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Definitions:

Accounts Receivable

Funds that customers owe to a business for products or services they have received but have not yet paid for.

Uncollectible Accounts

Uncollectible Accounts are receivables that a company does not expect to collect and are thus written off as an expense for bad debts.

Extraordinary Loss

Unusual and infrequent losses that are not part of the ordinary activities of a business, such as losses from natural disasters.

Goodwill Impairment

A charge that occurs when the fair value of goodwill falls below its carrying value on the balance sheet, indicating that the asset is not generating the expected profits.