When Tamar Snyder opened a shoe store, her accountant did not include the cash in her personal savings account as one of the assets of the business. This is an example of

Question

Quizplus · Accepted Answer

This is an example of the separate entity assumption, which states that business transactions must be kept separate from the personal transactions of the owner or other entities. The cash in Tamar's personal savings account should not be considered an asset of the business as it belongs to her personally, not the business.

When Tamar Snyder Opened a Shoe Store, Her Accountant Did