Personal transactions of proprietor are recorded in the books of account of business.

True

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False

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Solution

The correct option is B False
False. Personal transactions of the proprietor are not recorded in the books of accounts because of the business entity concept. A business entity is an accounting concept that suggests that a business has a separate identity from its owner.
The concept states that the enterprise should record transaction separately for those of the business and the owner. It is because of this concept capital is treated as liability and drawings as an asset.

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