Theory Base of Accounting · Class 11 · CBSE · Commerce Accountancy
Which accounting principle states that business is considered separate and distinct from its owner?
Practice question from Theory Base of Accounting (Class 11 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.
easy · MCQ · Q-3BAC9F
Which accounting principle states that business is considered separate and distinct from its owner?
- A.Going Concern Principle
- B.Business Entity PrincipleCorrect answer
- C.Accounting Period Principle
- D.Matching Principle
Solution
The Business Entity Principle (or Separate Entity Concept) treats the business and its owner(s) as two separate entities, meaning personal transactions of the owner are not mixed with business transactions.
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