Economic Entity Principle or Business Entity Assumption Recording of financial transactions of business entity should be kept separate from the owner’s personal financial transaction recording. The transaction should not be mixed. Asset, Liabilities, Cash transaction, Bank accounts should be kept separate. This...

Accounting principles Accrual Principle: It is the theory of recording an accounting transaction in the time period in which they occurred. Not in the previous period or next period. Suppose, you may receive the money in the next period or during the previous period as buying and selling occur a whole year in business....

Definition: The going concern assumption is the concept which assumes that, the business entity will be running for long time or foreseeable period. Which companies are gonna end soon or close in the near future are not going concern. ...

Definition: It is also called business entity assumption. A business entity is separate from owner. This is applicable to any types of business like companies, schools, hospitals, NGO's etc. Business transactions are totally separate from the owner's personal transactions. This principle is also applicable to sole...