The Business Entity Concept

Here, all accounts are kept in respect of business entities, which are separate from the owners of the business. By this, we mean that when a person commences a business like shop business, all records in relation to that shop will be kept separate from the person’s own financial records.

In the case of companies, partnerships ant that of accounts for taxation, these are statutory requirements in the form and content of the accounts to be prepared and so the accountant must therefore have enough knowledge of the relevant legislation if he is to give effective accounts of his work.

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