A Punching Machine having a life of three years acquired by the owner for personal use for Rs. 100 is debited to the office equipment account which of the accounting convention is being violated?

Matching concept

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Going concern concept

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Entity concept

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None of the above

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Solution

The correct option is C Entity concept
As the machine is acquired for personal use, therefore, it should not be debited to the office equipment account. the Business entity concept states that the businessman is separate from the business.
Therefore, the personal expense of the owner shall not be recorded in the business books of accounts.

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