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In accounting, a business or an organization and its owners are treated as two separate parties. This is called the entity concept. The business stands apart from other organizations as a separate economic unit. It is necessary to record the business's transactions separately, to distinguish them from the owners' personal transactions.
An Accounting Entity is simply an Entity for which accounting records are to be kept. The main requirements for something to be considered an "accounting entity" are: It can own property the value of which can be measured in financial terms; It can incur debts or liabilities which can also be measured in financial terms
Almost any type of organization or unit in society can be an economic entity. Examples of economic entities in accounting are hospitals, companies, municipalities, and federal agencies. The "Economic entity assumption" states that the activities of the entity are to be kept separate from the activities of its owner and all other economic ...
Accounting, also known as accountancy, is the process of recording and processing information about economic entities, such as businesses and corporations. [1] [2] Accounting measures the results of an organization's economic activities and conveys this information to a variety of stakeholders, including investors, creditors, management, and regulators. [3]
A corporate group is composed of companies. The general rule is that a company is a separate legal entity from its shareholders, that is the shareholder's liability for the subsidiary's debts is limited to the value of the shares, [3] and the shareholders cannot be required to perform the company's obligations.
Goodwill – accounting concept meaning the value of an entity over and above the value of its assets. Historical cost – original monetary value of an economic item. Mark-to-market accounting – accounting for the fair value of an asset or liability based on the current market price of the asset or liability, or for similar assets and ...
Consistency is the uniform application of accounting across points in time within an entity. Understandability: Understandability means that accounting reports should be expressed as clearly as possible and should be understood by those to whom the information is relevant.
Accounting Standards Codification, the only source of authoritative nongovernmental U.S. GAAP. In 2009, the Codification superseded the FASB's Statements of Financial Accounting Standards. 168 standards had been issued before the Codification. Concepts Statements, first issued in 1978. They are part of the FASB's conceptual framework project ...