The basis upon which the personal assets of the owner are excluded from the business's balance sheet is referred to as which assumption?
A) Materiality
B) Accounting entity
C) Accrual basis
D) Going concern

Question

Quizplus · Accepted Answer

The accounting entity assumption states that the business is a separate entity from its owners, and therefore the personal assets of the owner are excluded from the business's balance sheet.

A) Materiality refers to the principle that only significant and material transactions should be recorded in the financial statements. 
C) Accrual basis refers to the method of accounting that records revenues and expenses when they are earned or incurred, regardless of when the cash transaction occurs. 
D) Going concern assumption states that the business will continue operating indefinitely and is not expected to liquidate in the near future.

The Basis Upon Which the Personal Assets of the Owner