explaination and illustration of accounting entity concept?
Other - Business & Finance - 1 Answers
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Answer 1 :
Accounting information should be presented for specific and distinct reporting units. In other words, the accounting entity assumption requires that separate transactions of owners and others not be commingled with the reporting of economic activity for a particular business. On one hand, an individual may prepare separate financial statements for a business they own even if it is not a separate legal entity. On the other hand, consolidated financial statements may be prepared for a group of entities that are economically commingled but are technically separate legal units.
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