NCERT · Class 11 · Accountancy · Theory Base of AccountingAccording to which accounting concept, the business is considered to be separate and distinct from its owner?
Step-by-Step Solution
The Business Entity Concept states that business is treated as a separate entity from its owners, which is why capital contributed by the owner is treated as a liability for the business.
Detailed Options Breakdown
Option : Going Concern Concept
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Theory Base of Accounting.
Option 1: Money Measurement Concept
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Theory Base of Accounting.
Option 2: Business Entity Concept (Correct Answer)
Correct choice. Refer to the step-by-step verified solution guidelines above for details.
Option 3: Accounting Period Concept
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Theory Base of Accounting.
💡 Study Guide: This question tests core syllabus concepts from Theory Base of Accounting. For formulas, key summaries, and mock exam reference guides, read the full Theory Base of Accounting Revision Notes.