1. When partner of a partnership firm withdraws any amount from the firm, the partnership firm will debit this amount to partner’s drawings account.

Question

State the name of the accounting principle, concept or convention with which the following statements or situations are associated:

1. When partner of a partnership firm withdraws any amount from the firm, the partnership firm will debit this amount to partner’s drawings account.

2. No accounting entry is recorded for death of a key employee of the firm even if it is an important event affecting business.

Answer 1

1. According to Accounting entity concept, when partner of a partnership firm withdraws any amount from the firm, the partnership firm will debit this amount to partner’s drawings account.

2. According to Money measurement concept, no accounting entry is recorded for death of a key employee of the firm even if it is an important event affecting business.