Which one of the following assumptions or principles most logically supports the preparation of a single set of consolidated financial statements that combines the financial information of several wholly owned but separately identifiable businesses?
A)historical cost
B)industry practices
C)entity
D)materiality

Question

Quizplus · Accepted Answer

The entity principle assumes that a business can be identified and accounted for separately from its owners or other businesses. Therefore, preparing consolidated financial statements for several wholly owned but separately identifiable businesses is consistent with the entity principle.

Which One of the Following Assumptions or Principles Most Logically