Question

Mr. Shyam has started a business by investing Rs. 3,50,000. He purchased goods for Rs. 43,000, machinery for Rs. 1,25,000, and furniture for Rs. 65,000; Rs. 37,000 remains in hand. An amount of Rs. 80,000 will be treated as business capital, according to which of the following accounting concepts?
1. Accrual concept
2. Business entity concept
3. Matching concept
4. Money measurement concept

Answer 1

Answer:

2. Business entity concept

Explanation:

This concept ensures that personal and business transactions are accounted for separately, furthermore, attributing the Rs. 80,000 as a distinct component of the business's financial structure.