Economic Entity Assumption Under GAAP
Michael, the majority shareholder of a company, includes the cash from his personal bank account in the cash balance on the company's balance sheet. Is this practice permitted under Generally Accepted Accounting Principles (GAAP)?
AYes, because of the going concern principle.
BYes, because of the full disclosure principle.
CNo, because of the revenue recognition principle.
DNo, because of the economic entity assumption.
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