To Include the Personal Assets and Transactions of a Business's

question 226

Multiple Choice

To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the:

• A) Going-concern assumption.
• B) Business entity assumption.
• C) Objectivity principle.
• D) Revenue recognition principle.
• E) Monetary unit assumption.

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Definitions:

Liabilities

Financial obligations or debts owed by a company to outside individuals or entities.

Assets

Resources owned by a company or individual that have economic value and can provide future benefits.

Expense Recognition Principle

An accounting principle that directs the recognition of expenses in the same period as the related revenues.

Actual Cost

The actual expense incurred to acquire an asset or the expense incurred to produce goods or services, as opposed to budgeted or estimated costs.