The business entity assumption means that

A) the owner is part of the business entity
B) an entity is organized according to state or federal statutes
C) an entity is organized according to the rules set by the FASB
D) the entity is an individual economic unit for which data are recorded, analyzed, and reported

The business entity assumption means that an entity is an individual economic unit for which data are recorded, analyzed, and reported. It is a separate and distinct legal entity from its owners or investors. Therefore, choice D is the correct answer. Choice A is incorrect because it implies that the owner is part of the entity, which is not true under the business entity assumption. Choice B is incorrect because it refers to state or federal statutes, which do not necessarily relate to the business entity assumption. Choice C is incorrect because it refers to the rules set by the FASB (Financial Accounting Standards Board), which are related to accounting standards and not to the business entity assumption.