The separate economic entity assumption assumes that: A)the business will continue to operate indefinitely. B)financial events are meaningful only when they can be expressed in economic terms. C)a business's life can be separated into time periods with income being reported within one economic time period. D)the financial statements of a business reflect the affairs of the business-not the affairs of the owners.

Question

Quizplus · Accepted Answer

The separate economic entity assumption assumes that the financial statements of a business reflect the affairs of the business, not the affairs of the owners. It recognizes that a business is separate from its owners and other businesses, and therefore has its own financial statements and transactions that are distinct from those of its owners.

The Separate Economic Entity Assumption assumes That