Business entity principle separates business from owner

Steps:

• Recall that accounting principles define how transactions are recorded.
• Identify the business entity principle as treating the business as distinct from its owners.
• Match choices to principles: A relates to monetary unit, B to drawings, C to going concern.
• Select D as it directly describes recording from the business's perspective.

Why D is correct:

• The business entity principle states that the business is a separate economic unit, so all transactions are recorded as if the business itself is the accounting subject, per GAAP definitions.

Why the others are wrong:

• A describes the monetary unit principle, requiring records in currency.
• B refers to owner's drawings, which are recorded but as reductions in equity.
• C defines the going concern principle, assuming ongoing operations.

Final answer: D