Keeping the personal assets of the owner of a business separate from the assets of the firm is an example of
A) following the going concern assumption.
B) applying the realization principle.
C) following the separate entity assumption.
D) applying the conservatism constraint.

Question

Quizplus · Accepted Answer

The separate entity assumption states that the owner's personal assets are separate from the assets of the business. This helps ensure that the business is treated as a separate legal entity, and helps to clarify financial reporting by avoiding mixing personal and business assets.

Keeping the Personal Assets of the Owner of a Business