The business entity concept states that
Answer and explanation
Correct answer: C. the business is treated as separate from its owner
- Step 1: The owner's private transactions are kept apart from the business's own records. Answer: the business is treated as separate from its owner. Why not the others: the owner and the business are one person: That is the opposite. only large companies need records: It applies to every business. assets must be recorded at market value: That is not the concept.
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More Accounting concepts and double entry questions
- At the start of the year a trader's assets were KSh 900,000 and liabilities KSh 400,000. What was the owner's capital?
- A business buys office furniture for cash. What is the effect on the accounting equation?
- Which accounting concept requires that a business expects to continue operating in the foreseeable future?
- Which accounting concept requires revenue and expenses to be recorded in the period they occur, not when cash is paid or received?
- Which of the following is a capital expenditure?
- A debit balance on a bank account in the cash book means the business