Andre Dickinson, owner of Andre's Fine Wines, also owns a personal residence that cost $475,000.The market value of his residence is $625,000.During preparation of the financial statements for Andre's Fine Wines, the accounting concept most relevant to the presentation of Andre's home is

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Quizplus · Accepted Answer

The economic entity assumption is relevant here because it requires a clear distinction between the personal transactions of the owner and the transactions of the business. Andre's personal residence, regardless of its cost or market value, should not be included in the financial statements of Andre's Fine Wines.

Andre Dickinson, Owner of Andre's Fine Wines, Also Owns a Personal