Business entity principle separates personal and business assets

Steps:

• Identify the camera's purpose: purchased for family photos, making it a personal item.
• Recall accounting principles: business entity treats the business as separate from the owner.
• Apply the principle: personal assets cannot be recorded in business financial statements.
• Conclude: accountant rejects inclusion to maintain separation.

Why A is correct:

• Business entity principle defines the business as a distinct economic unit, excluding owner's personal assets from business records.

Why the others are wrong:

• B. Consistency requires uniform accounting methods over periods, unrelated to asset classification.
• C. Going concern assumes business continuity, not addressing personal vs. business assets.
• D. Realisation governs revenue recognition upon earning, irrelevant to recording personal purchases.

Final answer: A