The financial statements of a proprietorship should include the owner's personal assets and liabilities.

Question

Quizplus · Accepted Answer

One of the main characteristics of a proprietorship is that the owner's personal assets and liabilities are not included in the financial statements of the business. The business and owner are considered to be one entity, but for accounting purposes, they must be kept separate. Therefore, only the assets and liabilities of the business should be included in the financial statements of a proprietorship.

The Financial Statements of a Proprietorship Should Include the Owner's