Define the (accounting)entity concept,and explain two implications that follow from adopting it.

Question

Quizplus · Accepted Answer

The Answer is The entity concept is the notion that the business records of an entity should be kept separate from the records of the owner's personal affairs.
This results in:
• a bank account being maintained by the business,separate from the owner's personal bank account
• correct calculations of taxes,as the owner's personal transactions are not included in the business records
• avoidance of the business funds being wrongly used for personal expenses of the owner,and the personal funds of the owner being wrongly used for the business.

Define the (Accounting)entity Concept,and Explain Two Implications That Follow from Adopting