The owner of Westhampton Fish Eatery purchased a new car for his daughter who is away at college at a cost of $43,000 and reported this amount as Delivery Vehicle in the restaurant's balance sheet.The reporting of this item in this manner violated the:

Question

Quizplus · Accepted Answer

The business entity concept states that the business and its owners are separate entities, and therefore personal transactions of the owner should not be reported in the business's financial statements. Reporting the purchase of a personal vehicle as a delivery vehicle violates this concept. The cost principle, objectivity principle, and going-concern assumption are not applicable to this situation.

The Owner of Westhampton Fish Eatery Purchased a New Car