A Company Reports Financial Results Each Year

question 134

Multiple Choice

A company reports financial results each year.Which underlying assumption is illustrated by this example?

• A)economic entity concept
• B)going concern concept
• C)monetary unit assumption
• D)periodicity assumption

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Definitions:

Credit Postings

Entries made on the credit side of an account ledger, indicating an increase in liability, revenue, or equity accounts, or a decrease in asset or expense accounts.

Liability Account

An accounting record used to track obligations the company owes to others, such as loans, leases, or accounts payable.

Expense Account

An account in which businesses record and track expenditures related to specific activities, such as travel or entertainment, for accounting purposes.

Credit Postings

Entries made on the credit side of an account, indicating an increase in liabilities, revenue, or equity and a decrease in assets.