The Business Entity Principle Means That Accounting Information Reflects a Presumption

question 14

True/False

The business entity principle means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

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Definitions:

Statute of Frauds

A legal doctrine requiring certain contracts to be documented in writing and officially signed, aimed at preventing fraudulent claims and enforcing agreements.

Oral Contract

An agreement between parties that is spoken and not written, yet is legally binding under certain conditions.

Indefinite Period

A time span without a specified end date.

Merger Clause

A contract clause providing that the written contract is the complete expression of the parties’ agreement. Also called integration clause.