Lindsey Smith Decided to Start Her Own CPA Practice as a Professional

question 71

Multiple Choice

Lindsey Smith decided to start her own CPA practice as a professional corporation,Smith CPA PC.Her corporation purchased an office building for $35,000 which her real estate agent said was worth $50,000 in the current market.The corporation records the building as a $50,000 asset because Lindsey believes that is the real value of the building.Which of the following concepts or principles of accounting is being violated?

• A) Cost principle
• B) Entity concept
• C) Stable monetary unit concept
• D) Going-concern concept

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Definitions:

Self-esteem

One's subjective evaluation of their own worth or the degree to which they value themselves.

Spotlight Effect

The idea that other people are focusing more on how we look and act than they actually are.

Flattering Descriptions

Positive and often exaggerated comments that make someone or something seem better or more attractive than they are in reality.

Self-serving Bias

A common cognitive bias that causes individuals to perceive situations and interpret information in a way that benefits them or supports their pre-existing beliefs or interests.