Multiple choice

Transactions between owner and business are recorded as per

  1. periodicity

  2. going concern

  3. prudence

  4. business entity

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The business entity concept states that the business is a separate economic unit from its owner. Transactions between the owner and the business must be recorded separately - owner's contributions are capital, drawings are reductions in capital, and personal transactions of the owner are not mixed with business transactions.