Asked by Emily Apodaca on May 04, 2024
Verified
For accounting purposes business transactions should be kept separate from the personal transactions of the owners of the business.
Business Transactions
Business transactions are economic events that affect a company's financial position, involving exchanges of value between two parties.
Personal Transactions
Financial activities that are not related to the business and pertain to the personal dealings of an individual or owner.
Owners
Refers to individuals or entities that have legal ownership and control over a business or property.
- Understand the economic entity assumption and the separation of business and personal transactions.
Verified Answer
BG
Brittany GregoryMay 08, 2024
Final Answer :
True
Explanation :
This is a basic principle of accounting known as the "separation of entity and owner" or the "business entity concept." It helps to maintain accurate financial records and prevent confusion between personal and business finances.
Learning Objectives
- Understand the economic entity assumption and the separation of business and personal transactions.