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प्रश्न
According to Business Entity Concept:
विकल्प
Distinction should be made between fixed assets and current assets.
Distinction should be made between business transactions and personal transactions.
Distinction should be made between Capital expenditure and revenue expenditure.
Accounting equation is always true.
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उत्तर
Distinction should be made between business transactions and personal transactions.
Explanation:
The Business Entity Concept states that a business is treated as a separate legal entity from its owners. This means that there should be a clear distinction between the business's financial transactions and the personal financial transactions of its owners. The financial records of the business should only include business transactions, ensuring that the financial statements accurately reflect the business's financial position.
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संबंधित प्रश्न
Explain the need for GAAP for accounting.
According to this concept, a business firm is treated as a unit separate and distinct from its owners.
This concept assumes that the business will continue to exist for a long time in the future.
Name the basic principles of accounting.
Accounts should disclose all material information (with reference to the concept of accounting). Justify either for or against by giving two reasons.
With reference to the concept of accounting only those transactions are recorded in accounts which can be expressed in terms of money. Justify either for or against.
Every transaction has two effects. (with reference to the concept of Accounting). Give a reason either for or against.
Explain the expense principle.
Explain the principle of consistency.
"The principle of full disclosure and principle of materiality are contradictory." Comment.
