Financial statements are prepared for an economic business unit that is separate and distinct from its owners. This is referred to as
A) the going concern assumption.
B) the objective of financial reporting.
C) a cost constraint.
D) the economic entity concept.

Question

Quizplus · Accepted Answer

The economic entity concept is the accounting principle that the transactions of a business should be separate from those of its owners and other businesses. This concept allows for the preparation of financial statements specifically for the business, distinct from the personal financial information of its owners or any other business entity.

Financial Statements Are Prepared for an Economic Business Unit That