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प्रश्न
According to Business Entity Concept:
पर्याय
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
Justify the following:
Every transaction is recorded in at least three accounts.
Explain the need for GAAP for accounting.
The retirement of manager of the company cannot be recorded in the book of accounts, because it is not possible to estimate the financial effect of retirement. Which accounting principle would be applicable for the above statement?
This concept assumes that the business will continue to exist for a long time in the future.
“Accounts should disclose all material information” (with reference to the concept of accounting). Justify either for or against by giving two reasons.
Explain Matching Concept of GAAP.
"The capital provided by the owner is treated as a liability of the firm." Explain the concept on which the above depends.
Explain Accounting Period Concept.
Explain the expense principle.
Explain the realisation principle.
