BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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basic assumptions are the same as accounting principles
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the economic entity assumptions states that there should be a particular unit of accountability
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the monetary unit assumption enables accounting to measure employee morale
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partnerships are not economic entities
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Detailed explanation-1: -Answer: (b) The economic entity assumption states that there should be a particular unit of accountability. Explanation: The economic entity assumption refers to the need for a particular unit of accountability to ensure that entity activities are separately identifiable and distinct.
Detailed explanation-2: -There are four basic assumptions of financial accounting: (1) economic entity, (2) fiscal period, (3) going concern, and (4) stable dollar. These assumptions are important because they form the building blocks on which financial accounting measurement is based.
Detailed explanation-3: -A basic assumption of accounting that requires activities of an entity be kept separate from the activities of its owner is referred to as the: economic entity assumption.
Detailed explanation-4: -The going concern assumption is a fundamental assumption in the preparation of financial statements.
Detailed explanation-5: -Answer and Explanation: The correct option is (d) Going concern assumption. Going concern assumption assumes that an enterprise will continue in operation long enough to carry out its existing objectives and commitments.