Based on which of the following concepts, is Share Capital Account shown on the liabilities side of a Balance Sheet?
Correct answer: A. Business entity concept
- A. Business entity concept
- B. Money measurement concept
- C. Going concern concept
- D. Matching concept
Explanation
The business entity concept treats the company as separate from its owners, so share capital represents the owners' claim against the business and appears on the liabilities side. The other concepts do not explain this presentation.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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