Question

Assume you own more than one business. The financial records are prepared separately for each business. The records are also separate and distinct from your personal finances. This methodology relies on the going concern concept. (If false, identify error and correct.)

Answer 1

Answer:

False. It is called separate  legal entity.

Explanation:

In the eye of law, a company is a separate legal entity as it is distinct from its owners (i.e shareholders) , directors, promoters etc and as such is conferred with rights and is also subjected to certain duties and obligations.

It has the right to issue and be sued in any legal transaction it has entered its own name.

As a separate legal entity, it activities and operations must be kept separate from that of the owner and other entities.