Question

state the business entity concept ....? it is a 12 th class que any one knows.. plz help no one give answer
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Answer 1

The business entity concept states that the transactions associated with abusiness must be separately recorded from those of its owners or otherbusinesses. Doing so requires the use of separate accounting records for the organization that completely exclude the assets and liabilities of any otherentity or the owner.

Answer 2

The business entity concept basically states that both the owner and the business are two different entities and must be treated seperately. "Economic entity principle" is the other name for this entity which also says that all the businesses and the owners are seperate entities and must be dealt seperately. For example in Companies, the company and its shareholders are two seperate entities. The accounting equation which describes the business entity concept can be stated as:

Liability + Capital = Assets

Now, Why it is important?

It is important because if the business transactions messed up with other businesses or owner transitions, it may raise a question mark on accounting information usability.