Asked by Madeline Boutot on May 30, 2024
Verified
The concept that economic activity, which can be identified with a particular company must be kept separate and distinct from the owner(s) and from all other economic entities is known as
A) the separation concept.
B) the reporting entity concept.
C) the economic concept.
D) the business organization concept.
Economic Activity
Economic activity refers to activities related to the production, distribution, exchange, and consumption of goods and services in an economy.
Economic Entities
Organizations or individuals engaged in economic activities, recognized as separate units for accounting and financial reporting.
- Appreciate the importance of the separation between business and personal financial activities.
Verified Answer
OS
Olivia SartorioJun 06, 2024
Final Answer :
B
Explanation :
The reporting entity concept is the accounting principle that the financial activities of a business must be kept separate and distinct from the personal financial activities of its owner(s) or any other business entity. This ensures that the financial statements of the business accurately reflect its financial performance and position.
Learning Objectives
- Appreciate the importance of the separation between business and personal financial activities.
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