Stuart Allen Corporation Manufactures Computer Hardware

question 241

Multiple Choice

Stuart Allen Corporation manufactures computer hardware. The president of the corporation bought a new car as a gift for his daughter and paid for it using cash from the business. Since the corporation paid for the car, it was recorded in its books as an asset. Which of the following concepts or principles of accounting did the corporation violate?

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

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Definitions:

Explanation

A statement or account that makes something clear by describing it in more detail or revealing relevant facts or ideas.

Psychology

The scientific study of the mind and behavior, encompassing various facets of conscious and unconscious experience as well as thought.

Phenomena

Observable events or circumstances, especially those that are unusual or difficult to understand fully.

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A state that includes emotional health, life satisfaction, and a sense of purpose or fulfillment.