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WAEC Financial Accounting 2014 Question 27

Question 27

Accounting Concepts and Conventions

The accounting concept underlying the treatment of personal expenses of the business owner as drawing is

  1. A.periodicity.
  2. B.accrual.
  3. C.entity.
  4. D.materiality.
Show the answer and explanation

Answer: C (entity.)

Explanation

Because the business is separate from its owner (entity concept), the owner's personal expenses are not business expenses; they are drawings.