Joshua Thomas Is the Owner of Nexus Inc

question 131

Multiple Choice

Joshua Thomas is the owner of Nexus Inc., a manufacturer and retailer of computer hardware. Joshua recently bought a new car as a gift for his daughter. Since Joshua paid for the car from the earnings of the business, he recorded it in the books of Nexus as an asset. Which of the following concepts or principles of accounting is Joshua violating?

• A)monetary unit assumption
• B)economic entity assumption
• C)cost principle
• D)going concern assumption

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Definitions:

Horizontal Analysis

A financial analysis method that compares historical financial data over a series of periods to identify trends and growth patterns.

Increase Or Decrease

Terms that refer to the change in size, amount, or number of something, often used to describe financial and numerical data fluctuations.

Income Statement

This is a financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and net income.

Comparative Form

A grammatical construction used in many languages to compare two items or states, often formed by modifying adjectives or adverbs.