Question

Eliza Conner owns a small clothing boutique. Eliza uses her personal checking account for both business and personal needs. How would you convince Eliza that she should open a separate

bank account for her business?

Answer 1

1. It will cause them confusion throughout the tax calculating process.

2. Using a single account will make it difficult to keep payroll records.

3. Keep track of your personal expenses and earnings.

Step-by-step explanation:

1. It is preferable to establish a separate account to separate the firm's actual income and expenses.

2. Payroll expenses are indistinguishable from personal expenses.

3. This allows you to cross-check bank and hand-made documents for income and expenses. Because cash transactions may not be recorded in the bank account, the entrepreneur should preserve receipts in order to compute revenue and expenses, which may result in erroneous financial statements.