The business entity assumption requires that a business be accounted for separately from other business entities, including its owner or owners.

TRUE OR FALSE?

The business entity assumption requires that a business be accounted for separately from other business entities, including its owner or owners.
Financial statements include: the balance sheet, income statement, and statement of cash flows.
Posting is the transfer of the information from each journal entry to the ledger.
The principles of internal control include: establish responsibilities, maintain adequate records, insure assets, separate recordkeeping from custody of assets and perform regular and independent reviews.
The accounts receivable method to estimate bad debts obtains the estimated balance in the Allowance for Doubtful Accounts in one of two ways: (1) the percent uncollectible from the total accounts receivable or (2) aging accounts receivable.
An assets' cost includes all normal and reasonable expenditures necessary to get the asset in place and ready for its intended use.
Retailers consider sales from the use of VISA credit cards as credit sales.
A company can have a liability even if the amount of the obligation is unknown.
When companies pay the government collected sales tax, sales taxes payable is credited and cash is debited.
When making a mortgage payment, the interest on a mortgage note decreases each period, while the portion applied to the loan principal increases.
Employers must pay FICA taxes that are equal to the amount being withheld from their employees.

Solutions

Expert Solution

1. True , an entity is treated separately from its owners.

2. True.

3. True

4. True

5. True

6. True

7. False,they consider it as cash sale.

8. True.

9. False. Cash is credited and tax payable is debited.

10. False. Principal reduces with each payment.

11. True.

jeff jeffy answered 1 year ago

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