Assertion (A) : Personal transactions of the owners of the business are not recorded in the books.…
Both the assertion and reason are true, and the business entity concept explains the exclusion of owners' personal transactions. Accounting records concern the business as a…
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Assertion (A) : Personal transactions of the owners of the business are not recorded in the books.
Reason (R) : According to the business entity concept, each business enterprise is considered as an accounting unit separate from owners.
Answer and explanation
Correct answer A
Both the assertion and reason are true, and the business entity concept explains the exclusion of owners' personal transactions. Accounting records concern the business as a separate unit, so private transactions unrelated to it do not enter its books.
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Karnataka SET (KSET)