Juan has an accounting philosophy according to which he keeps the loans borrowed from the business separate from the loans he takes from banks for his own purposes.Which of the following basic accounting concepts is reflected in Juan's accounting philosophy?
A) The business entity idea
B) The going concern expectation
C) The accounting equation
D) The revenue and expense premise

Question

Quizplus · Accepted Answer

Juan's accounting philosophy reflects the basic accounting concept of the business entity idea, which assumes that a business is a separate entity from its owner and should be treated as such in accounting records. By keeping his personal loans separate from the business loans, Juan is recognizing that the business has its own financial transactions and should be reported separately from his personal finances. The other options are not relevant to Juan's philosophy.

Juan Has an Accounting Philosophy According to Which He Keeps