Multiple choice

According to which concept are shareholders treated as creditors, for the amount they paid on shares, of which they are subscribed to?

  1. Cost concept

  2. Duality concept

  3. Business Entity concept

  4. Going Concern Concept

  5. Since shareholders are owner of the business they cannot be treated as creditors of the business
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Under Business Entity concept shareholders are treated as creditors of the business. It is also known as separate entity concept.

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