A business entity is an entity that is formed and administered as per corporate law in order to engage in business activities, charitable work, or other activities allowable. Most often, business entities are formed to sell a product or a service.

Fundamental Accounting Assumptions

Fundamental Accounting Assumptions are the basic principles, concepts, and guidelines that govern the accounting practices of an organization. These assumptions provide the foundation for the preparation and presentation of financial statements. There are four fundamental accounting assumptions, which are as follows:

1. Business Entity: Business entity assumption states that the business is separate from its owners, and the financial statements are prepared from the viewpoint of the business entity itself.

2. Going Concern: Going concern assumption states that the business will continue its operations for an indefinite period of time unless there is evidence to the contrary.

3. Consistency: Consistency assumption states that the accounting practices and methods adopted by an organization should be consistent from one period to another.

4. Accrual: Accrual assumption states that the revenues and expenses should be recognized when they are earned or incurred, regardless of when the cash is received or paid.

Answer Explanation:

The correct answer is option 'B' - Business Entity. Business Entity is not a fundamental accounting assumption, but it is a basic concept of accounting. Business entity concept states that the business is separate from its owners, and the financial statements are prepared from the viewpoint of the business entity itself. However, it is not considered as a fundamental accounting assumption.

The other three options - Going Concern, Consistency, and Accrual - are all fundamental accounting assumptions, which are widely accepted and used in the preparation and presentation of financial statements.