CameraIcon
CameraIcon
SearchIcon
MyQuestionIcon
MyQuestionIcon
1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

Business is treated as an entity separate from its owners, creditors, managers and others. This is as per _________________.

A
Money measurement
No worries! We‘ve got your back. Try BYJU‘S free classes today!
B
Business Entity Concept
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
C
Going Concern Concept
No worries! We‘ve got your back. Try BYJU‘S free classes today!
D
Dual Aspect Concept
No worries! We‘ve got your back. Try BYJU‘S free classes today!
Open in App
Solution

The correct option is D Business Entity Concept
The concept of business entity assumes that business has a distinct and separate entity from its owners. It means that for the purposes of accounting, the business and its owners are to be treated as two separate entities. Keeping this in view, when a person brings in some money as capital into his business, in accounting records, it is treated as liability of the business to the owner.
Here, one separate entity (owner) is assumed to be giving money to another distinct entity (business unit).
Similarly, when the owner withdraws any money from the business for his personal expenses(drawings), it is treated as reduction of the owner’s capital and consequently a reduction in the liabilities of the business.

flag
Suggest Corrections
thumbs-up
0
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Financial Statements of NPO
ACCOUNTANCY
Watch in App
Join BYJU'S Learning Program
CrossIcon