A Corporation Reports the Sale of Some of Its Shares

question 124

Multiple Choice

A corporation reports the sale of some of its shares to a shareholder in its financial statements, and the shareholder reports the same transaction as an investment. Therefore,

• A) the revenue recognition principle has been violated.
• B) the separate entity assumption has been violated.
• C) the double entry accounting concept has been violated.
• D) no accounting concept has been violated.

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Definitions:

Defecation Reflexes

The natural reflexes that control the process of expelling feces from the body.

Diuretic Effect

The increase in urine production by the kidneys, commonly induced by certain medications or substances, leading to reduced fluid retention in the body.

Eight-ounce Glasses

A common measurement used in the recommendation for daily water intake, suggesting the consumption of eight 8-ounce glasses of water a day for hydration.

Gas-producing Foods

Foods that increase gas in the digestive system, often leading to bloating and discomfort.