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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

What Would You Say?

A friend of yours wants to start her own pet-sitting business. She already has a business license that is required in her city. She has had a personal checking account for years. You have told her that she also needs to open a separate account for her business needs, but she does not understand why she needs to have two separate accounts. Explain to her why she should have a business account separate from her personal account. Use some of the language of business you have learned in your text’s Introduction and in this chapter.

To determine

Indicate the reasons for maintaining a separate business account for a business.

Explanation

Accounting concepts: These are the assumptions and concepts necessary to prepare and report the accounting formation in a relevant format which is better understood by the users.

Separate entity concept: The business entity is considered and maintained as a separate business unit...

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