According to Business Entity concepta)Transactions between the business and its owner are recorded from the business point of viewb)Transactions between the business and its owner are recoded considering it single entityc)Transactions between the business and its owner are not recodedd)None of theseCorrect answer is option 'A'. Can you explain this answer?

Question

Answer

Correct answer is A because bussiness is A separate entity from its owner and the money which the owner will use for bussiness will come under bussiness transactions as well as the money used for personal uses will come under drawings and the owner have to pay back the drawings to the bussiness

Answer

A is correct because according to this principle the business n owner are separate from legal point of view and the owner is creditor of firm n money invested by him is treated as liabilities  for firm

Answer

Option A because business entity concept states that business and owner are separate and the money invested by the owner is a liability for the firm.

Answer

Answer:

The Business Entity concept is a fundamental principle in accounting that states that the business should be considered a separate entity from its owner. This concept helps in maintaining the distinction between personal transactions of the owner and the business transactions. It ensures that the financial records of the business are kept separate from the personal finances of the owner.

Transactions recorded from the business point of view:
Under the Business Entity concept, transactions between the business and its owner are recorded from the business point of view. This means that any transactions that occur between the owner and the business are treated as separate entities and are recorded as such in the books of accounts.

Considered as a single entity:
Transactions between the business and its owner are not recorded considering it as a single entity. The Business Entity concept requires that the business and its owner be treated as separate entities, and their transactions should be recorded accordingly.

Recording of transactions:
Transactions between the business and its owner are recorded from the business point of view. This means that any transactions such as capital contributions by the owner, withdrawals by the owner, or loans given by the owner to the business are recorded as separate transactions in the books of accounts.

For example, when the owner invests capital into the business, it is recorded as an increase in the owner's equity and the corresponding increase in the business's capital account. Similarly, when the owner withdraws funds from the business for personal use, it is recorded as a decrease in the owner's equity and the corresponding decrease in the business's capital account.

Importance of Business Entity concept:
The Business Entity concept is important because it helps in maintaining the accuracy and reliability of the financial information. By treating the business and its owner as separate entities, it ensures that the financial records reflect only the business transactions and not the personal transactions of the owner. This separation is crucial for financial reporting, tax purposes, and legal compliance.

In conclusion, the correct answer is option 'A' - Transactions between the business and its owner are recorded from the business point of view. The Business Entity concept requires the separation of business and personal transactions and ensures that the financial records accurately represent the business's financial position and performance.

Answer

Option A ,because we known that transaction of money in business is most important.
thankx.

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