According to which concept the owner of an enterprise pays the "interest on drawings"? a) Accrual co - (c) Entity concept Description: The owner of the enterprise pays the interest on drawings according to the Entity concept. According to this concept, business enterprise is a separate identity a part from its owner. The proprietor is treated as a creditor of the company. Therefore, when he withdraws money for his personal use from the business, it is treated as loan from the business to the proprietor, that is why he pays interest on drawings. - Fundamentals of Accounting Interview Questions and Answers

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Question: According to which concept the owner of an enterprise pays the "interest on drawings"? a) Accrual concept b) Conservatism concept c) Entity concept d) Dual Aspect concept

Answer: (c) Entity concept
Description: The owner of the enterprise pays the interest on drawings according to the Entity concept. According to this concept, business enterprise is a separate identity a part from its owner. The proprietor is treated as a creditor of the company. Therefore, when he withdraws money for his personal use from the business, it is treated as loan from the business to the proprietor, that is why he pays interest on drawings.

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Question: According to which concept the owner of an enterprise pays the "interest on drawings"? a) Accrual concept b) Conservatism concept c) Entity concept d) Dual Aspect concept

Answer:

(c) Entity concept
Description: The owner of the enterprise pays the interest on drawings according to the Entity concept. According to this concept, business enterprise is a separate identity a part from its owner. The proprietor is treated as a creditor of the company. Therefore, when he withdraws money for his personal use from the business, it is treated as loan from the business to the proprietor, that is why he pays interest on drawings. Source: CoolInterview.com

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