The business entity assumption means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

Question

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The business entity assumption means that the business is considered a separate entity from its owners or other businesses, and its financial activities are recorded and reported independently. The presumption that the business will continue operating instead of being closed or sold is referred to as the going concern assumption.

The Business Entity Assumption Means That Accounting Information Reflects a Presumption