Tell me some eXaple of eccounting entity concept
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The business entity concept (also known as separate entity and economic entity concept) states that the transactions related to a business must be recorded separately from those of its owners and any other business. In other words, while recording transactions in a business, we take into account only those events that affect that particular business; the events that affect anyone else other than the business entity are not relevant and are therefore not included in the accounting records of the business.
This concept is very important because if transactions of a business are mixed up with that of its owners or other businesses, the accounting information would lose its usability.
The business entity concept of accounting is applicable to all types of business organizations (i.e., sole proprietorship, partnership and corporation) even if a law does not recognize a business and its owner as the separate entities.
This concept is very important because if transactions of a business are mixed up with that of its owners or other businesses, the accounting information would lose its usability.
The business entity concept of accounting is applicable to all types of business organizations (i.e., sole proprietorship, partnership and corporation) even if a law does not recognize a business and its owner as the separate entities.
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