The reporting entity concept requires that an entity's business activities be combined with the activities of its owner for financial reporting purposes.

Question

Quizplus · Accepted Answer

The reporting entity concept requires that an entity's financial statements report only on the activities of the entity itself, not on the activities of the owner or other related parties. This is because the entity is considered a separate economic entity from its owner.

The Reporting Entity Concept Requires That an Entity's Business Activities