Which of the following concepts is exposed to hold when a proprietor makes a drawing of goods or cash from the business?
Answer Details
The concept that is exposed to hold when a proprietor makes a drawing of goods or cash from the business is the "business entity" concept. The business entity concept states that the business is separate and distinct from its owner(s), and the owner's personal transactions or assets should not be mixed with the transactions or assets of the business. When the proprietor takes out goods or cash from the business for personal use, it is considered a withdrawal or a reduction of the owner's equity in the business and should be recorded accordingly. This ensures that the financial statements of the business reflect only the transactions and activities of the business and not those of the owner(s) personally.