When Tamar Snyder opened a shoe store, her accountant did not include the cash in her personal savings account as one of the assets of the business. This is an example of
A)the conservatism constraint.
B)the materiality constraint.
C)industry practice constraint.
D)the separate entity assumption.

Question

Quizplus · Accepted Answer

The accountant did not consider Tamar Snyder's personal savings account as an asset of the business, which implies that the accountant applied the separate entity assumption, where the business is considered separate from the owner's personal finances.

When Tamar Snyder Opened a Shoe Store, Her Accountant Did