The business entity assumption:
A) Presumes that the life of a company can be divided into time periods, such as months and years, and that useful reports can be prepared for those periods.
B) Means that we can express transactions and events in monetary, or money, units.
C) Means that a business is accounted for separately from other business entities, including its owner.
D) Prescribes that a company record the expenses it incurred to generate the revenue reported.
E) Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

Question

Quizplus · Accepted Answer

The business entity assumption assumes that a business is accounted for separately from other business entities, including its owner. This means that the business is seen as a distinct entity or entity in its own right, with its own financial transactions and records.

The Business Entity Assumption