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22 June, 03:02

Joshua Thomas Corporation manufactures and retails computer hardware. The president of the corporation bought a new car as a gift for his daughter and paid for it using cash from the business. Since the corporation paid for the car, it was recorded in its books as an asset. Which of the following concepts or principles of accounting did the corporation violate? a. monetary unit assumption

b. economic entity assumption

c. cost principle

d. going concern assumption

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  1. 22 June, 03:26
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    b. economic entity assumption

    Explanation:

    Since the president of the corporation used the cash of the business in order to pay for his personal purchased item, the corporation violated Economic Entity Assumption which says that all transactional data associated with a specific entity is assumed to be clearly attributed to the entity, and does not include other transactional data associated with the entity's owners or business partners.
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