The accounting assumption that the financial statements of a business reflect the activities of the business and not the activities of the owners is the:
A)matching assumption.
B)periodicity of income assumption.
C)separate economic entity assumption.
D)monetary unit assumption.

Question

Quizplus · Accepted Answer

The separate economic entity assumption is the accounting assumption that requires businesses to be treated as separate economic entities from their owners. This means that the financial statements of a business should only reflect the activities of the business itself and not the personal activities of the owners.

The Accounting Assumption That the Financial Statements of a Business