PRC-1 · Chapter 1 · Question 84 of 100
The owner of 'Style Boutiques' pays her personal home electricity bill using her own personal cash from her private wallet. How should this event be treated in the accounting records of 'Style Boutiques'?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) It is not a business transaction and should be completely ignored in the business books.
Explanation
Since the owner paid a personal expense using personal funds, the business entity itself is completely unaffected. Therefore, it is not a business transaction and no entry is made in the business ledgers.
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