Emily Hogan recently opened a new business. The business has been very successful and as a reward for all her hard work Emily spent a day at the local spa. Emily paid for the spa using a company credit card and charged the amount to the expense account called Repairs and Maintenance expense. Emily's actions violated which of the following?
A) The going concern assumption
B) The monetary unit assumption
C) The cost principle
D) The economic entity concept

Question

Quizplus · Accepted Answer

Emily's use of the company credit card for personal expenses violates the economic entity concept, which states that business transactions must be kept separate from the personal transactions of its owners or related parties.

Emily Hogan Recently Opened a New Business