The accounting assumption that requires every business to be accounted for separately from other business entities, including its owner or owners is known as the:
A) Time-period assumption.
B) Business entity assumption.
C) Going-concern assumption.
D) Revenue recognition principle.
E) Cost principle.

Question

Quizplus · Accepted Answer

The business entity assumption requires that a business is accounted for separately from its owner or owners, as well as any other business entities. This is important in order to accurately track the finances and performance of each individual entity. The other options listed are all important accounting assumptions, but do not relate to the requirement of separate accounting for each business entity.

The Accounting Assumption That Requires Every Business to Be Accounted