Assertion (A) : Personal transactions of the owners of the business are not recorded in the books.…
Both Assertion (A) and Reasoning (R) are correct, and (R) is the correct explanation of (A). Under the business entity concept, a business is treated as an accounting unit…
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Assertion (A) : Personal transactions of the owners of the business are not recorded in the books. Reasoning (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 Assertion (A) and Reasoning (R) are correct, and (R) is the correct explanation of (A). Under the business entity concept, a business is treated as an accounting unit distinct from its proprietors, which is why the personal transactions of owners are excluded from the firm's accounting books.
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UGC NET Commerce