“Business units last indefinitely”. Mention and explain the concep

1.	“Business units last indefinitely”. Mention and explain the concept on which the statement is based.
Answer» This concept implies that a business unit is separate and distinct from the owner or owners, that is, the persons who supply capital to it. Based on this concept, accounts are prepared from the point of view of the business and not from the owner’s point of view. Hence, the business is liable to the owner for the capital contributed by him/her. According to this concept, only business transactions are recorded in the books of accounts. Personal transactions of the owners are not recorded. But, their transactions with the business such as capital contributed to the business or cash withdrawn from the business for the personal use will be recorded in the books of accounts. It implies that the business itself owns assets and owes liabilities.

“Business units last indefinitely”. Mention and explain the concept on which the statement is based.

Answer»

This concept implies that a business unit is separate and distinct from the owner or owners, that is, the persons who supply capital to it. Based on this concept, accounts are prepared from the point of view of the business and not from the owner’s point of view. Hence, the business is liable to the owner for the capital contributed by him/her.

According to this concept, only business transactions are recorded in the books of accounts. Personal transactions of the owners are not recorded. But, their transactions with the business such as capital contributed to the business or cash withdrawn from the business for the personal use will be recorded in the books of accounts. It implies that the business itself owns assets and owes liabilities.

Discussion

No Comment Found

Related InterviewSolutions

What were the two main occupations of the Rig Vedic Aryans?
Name the two political institutions which exercised check on the powers of the King in the Rig Vedic period.
What w’as the position of women in the Rig Vedic age ?
Describe the social life of the Rig Vedic Aryans with reference to the following: (a) The Family Structure (b) Position of Women (c) Varna System
With reference to the following explain the main features of the Rig Vedic Economy: (a) Agriculture (b) Domestication of Animals (c) Trade Transactions, Crafts and Transportation
Mention any two archaeological sources to reconstruct the later Vedic Age.
Mention any two of the Ashrams in the life of a man in Aryan society.
What information do we gather from the later Vedic literature in respect of: (a) Spread of Vedic Civilization to many New Regions. (b) Role of Iron in later Vedic Economy.
Mention briefly the rituals and sacrifices of the later Vedic Aryans?
What is the message of the Bhagavad Gita?