Answer the following statements true (T) or false (F)
1. The business entity principle means that accounting information reflects a presumption that
the business will continue operating instead of being closed or sold.
2. Generally accepted accounting principles are the basic assumptions, concepts, and guidelines
for preparing financial statements.
3. The business entity assumption means that a business is accounted for separately from other
business entities, including its owner or owners.
4. As a general rule, revenues should not be recognized in the accounting records when earned, but rather when cash is received.
5. Specific accounting principles are basic assumptions, concepts, and guidelines for preparing
financial statements and arise out of long-used accounting practice.
1. FALSE
2. TRUE
3. TRUE
4. FALSE
5. FALSE
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