Question

business enterprise is separate from its owner according to _______ concepts

Answer 1

Further speaking about the concept, it is , Business Entity Concept! This concept specifies that, the transactions of the business should be separated from the ones of its owners(as they are considered outsiders) and that business itself is an entity!

Answer 2

Business Entity Concept.

• A firm's transactions must be recorded separately from those of its owners or other enterprises, according to the idea of a business entity.
• One of the accounting principles known as the "business entity concept" holds that a firm and its owner are two independent entities that should be treated as such.
• According to this idea, the financial transactions involving the business entity should be documented separately from the transactions involving the business owners.
• As a result, any transactions or events that have an influence on the business will be documented, whereas any occurrences that have an impact on any other entities except the business will be dismissed as irrelevant.
• The accounting information will be less useful if the transactions are not documented in a mixed manner (involving both businesses and business owners in one statement).

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