Correct answer? With proper definition Under what circumstances does the economic entityassumption not apply?a) When a sole proprietor files for personal bankruptcyaffecting the businessb) When a corporation issues new sharesc) When a partnership adds new partnersd) When a company pays dividends

The economic entity assumption states that a business's financial records should be kept separate…

Answered: Under what circumstances does the…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter13: Choice Of Business Entity—general Tax And Nontax Factors/formation

Section: Chapter Questions

Problem 16DQ

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In a liquidation proceeding, if the proceeds on the realization of an asset exceed the lien against that asset, the excess is assigned to*a. the holder of the lien.b. meet the claims of the unsecured creditors.c. the stockholders of the corporation.d. other lien holders whose assets will not realize a sufficient amount to cover their liens.
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Under what circumstances does the economic entity assumption not apply? a) When a sole proprietor files for personal bankruptcy affecting the business b) When a corporation issues new shares c) When a partnership adds new partners d) When a company pays dividends