The accounting rule which requires that only the business transactions of Team Shirts be shown on the balance sheet is the ________.
A)separate-entity assumption
B)going-concern assumption
C)monetary-unit assumption
D)historical-cost principle

Question

Quizplus · Accepted Answer

The separate-entity assumption is an accounting principle that requires a business to be treated as a separate economic entity from its owners. This means that only the transactions and events that pertain to the business should be recorded in the financial statements. Therefore, only the business transactions of Team Shirts should be reflected on their balance sheet.

The Accounting Rule Which Requires That Only the Business Transactions