Without the Business Entity Convention, Which Item in the Statement

question 57

Multiple Choice

Without the business entity convention, which item in the statement of financial position would not exist?

• A)Assets.
• B)Equity.
• C)Liabilities.
• D)Cash at bank.

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Definitions:

Operating Hours

The scheduled or actual hours during which a business is open to conduct operations or provide services to customers.

Double-Declining-Balance Rate

A method of accelerated depreciation that applies a constant rate, which is double the straight-line rate, to the declining book value of an asset each year.

Straight-Line Rate

A method of calculating depreciation of an asset, dividing its cost by the number of years in its useful life.

Depreciation Expense

The structured spreading of the expense associated with a tangible asset across its useful life.