Stuart Allen Company Manufactures Computer Hardware

question 72

Multiple Choice

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

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

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Definitions:

Observational Studies

Research methods where subjects are observed in their natural environment without intervention from the researchers.

Interpreting Results

The process of analyzing and drawing conclusions from data or outcomes of a study or experiment.

Tabulating

The act of organizing data into a table or chart form for easy analysis.

Lack of Evidence

A situation where there is insufficient proof or data to support a claim, hypothesis, or conclusion.