From an accounting viewpoint, when is a business considered an entity separate from its owner(s)?
A) Only when organized as a sole proprietorship.
B) Only when organized as a partnership.
C) Only when organized as a corporation.
D) In each of the above situations, the business is an accounting entity separate from the activities of the owner(s).

Question

Quizplus · Accepted Answer

In each of the above situations, the business is an accounting entity separate from the activities of the owner(s). This means that regardless of how the business is organized (sole proprietorship, partnership or corporation), it is considered a separate legal and financial entity from its owner(s), and must abide by accounting principles and regulations.

From an Accounting Viewpoint, When Is a Business Considered an Entity