Question

What does business entity refer to in accounting?

• A. Only the owner’s personal entity
• B. Any specifically identifiable business enterprise
• C. The government
• D. None of the above

Answer 1

Answer:

B. Any specifically identifiable business enterprise

BASIC TERMS OF ACCOUNTING:

1. Entity - Business entity means a specifically identifiable business enterprises like Wipro, Reliance Industries Ltd, Kalyan silks

2. Transaction - The term transactions means a financial transactions or economic events involving some value between two or more entities.

E.g. purchase of goods, payment of salary, receipt of money

There are two type of Business transactions

1. Cash transactions - Immediate payment or receipt of cash, settled immediately.

2. Credit transactions - Payment or receipt of cash in result of a transaction is postponed to a future date .