The use of computers in recording business events has made the recording process more efficient does not use the same principles as manual accounting systems. has greatly impacted the identification stage of the accounting process. is economical only for large businesses. GAAP stands for Generally Accepted Auditing Procedures Generally Accepted Accounting Principles Generally Accepted Auditing Principles Generally Accepted Accounting Procedures The economic entity assumption requires that the activities of different entities can be combined if all the entities are corporations. must be reported to the Securities and Exchange Commission. of a sole proprietorship cannot be distinguished from the personal economic events of its owners. of an entity be kept separate from the activities of its owner. Which of the following is not an advantage of the corporate form of business organization? Limited liability of stockholders Transferability of ownership Unlimited personal liability for stockholders Unlimited life Smith is the proprietor (owner) of Smitty's, a retailer of athletic apparel. When recording the financial transactions of Smitty's, Deb does not record an entry for a car she purchased for personal use. Deb took out a personal loan to pay for the car. What accounting concept guides Deb's behavior in this situation? Pay back concept Economic entity assumption Cash basis concept Monetary unit assumption A balance sheet shows Revenues , Liability , and owner's equity Expenses , drawings , and owners's equity Revenues , expenses, and prepaid accounts Assets, liabilities and owner's equity 7) The historical cost principle requires that when assets are acquired, they be recorded at appraisal value. cost. market price. book value. 8) The proprietorship form of business organization a. must have at least three owners in most states. b. represents the largest number of businesses in the United States. c. combines the records of the business with the personal records of the owner. d. is characterized by a legal distinction between the business as an economic unit and the owner. 9) The economic entity assumption requires that the activities a. of different entities can be combined if all the entities are corporations. b. must be reported to the Securities and Exchange Commission. c. of a sole proprietorship cannot be distinguished from the personal economic events of its owners. d. of an entity be kept separate from the activities of its owner. 10) Owner's equity can be described as a. creditorship claims on total assets. b. ownership claims on total assets. c. benefactor's claim on total assets. d. debtor claims on total assets. 11) Sources of increases to owner's equity are a. additional investments by owners. b. purchases of merchandise. c. withdrawals by the owner. d. expenses