The Separate Economic Entity Assumption assumes That

question 8

Multiple Choice

The separate economic entity assumption assumes that:

• A)the business will continue to operate indefinitely.
• B)financial events are meaningful only when they can be expressed in economic terms.
• C)a business's life can be separated into time periods with income being reported within one economic time period.
• D)the financial statements of a business reflect the affairs of the business-not the affairs of the owners.

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Definitions:

Relaxed

A state or condition where there is an absence of tension or anxiety, often characterized by calmness and ease.

Variable

A characteristic, number, or quantity that increases or decreases over time, or takes different values in different situations.

Diversify Sources

A strategy to reduce risk in investment or business operations by acquiring a wide range of assets or various types of resources.

Dependency

A situation where one entity relies on another for support, resources, or sustenance.