Question

Which of the following statement best describes the nature of an accounting entity:

a. accounting entity is a fundamental assumption of the conceptual framework of financial accounting
b. a stable unit for which the accounting records are kept for
c. accounting entity is separate from its owners
d. accounting entity may not be a legal entity
e. all of the above statements are correct

Answer 1

Answer:

I think option C. Because who is able to execute the accounting activities of any kind of organization,he is never also explain his own financial condition. Rather he also be worried about that organization.

For example, if I appoint as a accountant to any kind of organization, I also be worried to show the complete profile and loses through the profile or loss A/c and to explain the proper financial condition of that concern through the balance sheet. In that case I never include my own financial records in the accounting activities.