The major underlying assumptions of accounting include all of the following except:
A)Economic entity.
B)Monetary unit.
C)Legal liability.

Question

Quizplus · Accepted Answer

Legal liability is not one of the major underlying assumptions of accounting. The two other major underlying assumptions are economic entity and monetary unit. Economic entity means that the financial activities of a business must be kept separate from the personal financial activities of its owners. Monetary unit means that financial transactions must be expressed in a common monetary unit, such as dollars or euros.

The Major Underlying Assumptions of Accounting Include All of the Following