The economic entity assumption requires that the activities
A) of different entities can be combined if all the entities are corporations.
B) must be reported to the Securities and Exchange Commission.
C) of a sole proprietorship cannot be distinguished from the personal economic events of its owners.
D) of an entity be kept separate from the activities of its owner.

Question

Quizplus · Accepted Answer

The economic entity assumption requires that the activities of an entity be kept separate from the activities of its owner. This means that the financial statements of a business must only include transactions related to the business itself, and not include personal transactions of the owner. This allows for a clear and accurate representation of the financial position of the business.

The Economic Entity Assumption Requires That the Activities