An owner's personal spending stays out of the company's statements. That rule follows from the:
ASimple audit rule
BStandard costing rule
CSales entity rule
DSeparate entity concept
Answer & Solution
Correct answer: D. Separate entity concept
1. The business is treated as its own person.
2. Only company operations are reported.
3. It is the separate entity concept.
_Source: OpenStax Principles of Financial Accounting, Chapter 3, Analyzing and Recording Transactions._
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