Lawton Company Records Business Transactions in Dollars and Disregards Changes

question 81

Multiple Choice

Lawton Company records business transactions in dollars and disregards changes in the value of a dollar over time.Which of the following accounting assumptions does this represent?

• A) economic entity assumption
• B) going concern assumption
• C) accounting period assumption
• D) monetary unit assumption

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Definitions:

Materially Participate

Involvement in the operations of a business or activity in a regular, continuous, and substantial way, affecting the tax consequences.

AMT Tax Rate

The percentage applied to compute the Alternative Minimum Tax, ensuring that taxpayers pay a minimum amount of tax.

Qualified Nonrecourse Financing

Debt financing for which the borrower is not personally liable and which is secured by real property used in the borrower’s trade or business.

At-Risk

A term indicating exposure to potential loss or damage, often used in financial, health, and safety contexts.