The accounting convention that requires the activities of the business to be kept separate from the activities of the owner is the:
A) accounting period convention.
B) conservatism convention.
C) dual aspect convention.
D) business entity convention.

Question

Quizplus · Accepted Answer

The business entity convention is the accounting convention that requires the activities of the business to be kept separate from the activities of the owner. This means that the financial statements of the business only reflect the activities and transactions of the business, and not the personal transactions of the owner. This convention is important for accurate financial reporting and for assessing the financial performance of the business.

The Accounting Convention That Requires the Activities of the Business