Question

$400,000, and his personal bank account has a balance of​ $1,200. Identify the principle or assumption that best matches the​ situation: a. ​Michael's personal assets are not recorded on the Apartment​ Exchange's balance sheet. b. The Apartment Exchange records furniture at its cost of​ $9,000, not its market value of​ $13,000. c. The Apartment Exchange reports its financial statements in U.S. dollars. d. Michael expects the Apartment Exchange to remain in operations for the foreseeable future. a.​ Michael's personal assets are not recorded on the​ company's balance​ sheet:

Answer 1

Answer:

a.​ Michael's personal assets are not recorded on the​ company's balance​ sheet:

Explanation:

the question in incomplete, so I looked it up:

Michael McNamee is the proprietor of a property management​ company, Apartment​ Exchange, near the campus of Penscola State College. The business has cash of​ $8,000 and furniture that cost​ $9,000 and has a market value of​ $13,000. The business debts include accounts payable of​ $6,000. Michael's personal home is valued at​ $400,000, and his personal bank account has a balance of​ $1,200. Identify the principle or assumption that best matches the​ situation:

In accounting, the economic entity principle states that a company's financial  records are separate and distinct from the financial records of its owners. Even though Michael is the owner of company, his personal assets should not be included in the company's financial statements.