Rajnish,proprietor of ABC and Co. purchased a LCD TV and installed it at his residence and made the payment by issuing a cheque from the account of ABC and Co.The accountant recorded the TV as business asset.Is the accountant correct?

Dear Student,
The accountant is not correct. Business entity concept in accounts says that owner of business and the business are two separate entities. Hence, LCD purchased by Rajnish is for personal use and not for business use and hence cannot be taken as business asset.


Regards