Question

The fact that personal expenditures of company owners (i.e., the purchase of personal use items including food, home improvements, family automobiles, etc.) should not be reflected as assets or expenses in the company’s financial statements is a reflection of

Answer 1

Answer:

the entity concept

Explanation:

According to the entity concept, a company and its owners are treated as two separate parties or economic units. Therefore, transactions such as purchases and receipts of the business must be recorded separately from those of its owners. Therefore, separate accounting records will have to be maintained to record the transactions.