Entity Concept
The entity concept states that a business must be treated as a separate economic unit from its owners or stakeholders. Personal and business transactions are recorded distinctly to ensure accurate reporting. This principle is foundational in accounting, it safeguards financial clarity, prevents commingling of funds, and supports transparent auditing and taxation.
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Encashment
Encashment involves converting negotiable instruments like cheques, bills, or bonds into cash. In accounting, it represents the realisation of funds…
Estimated Useful Life
Estimated useful life refers to the anticipated period an asset will remain productive and contribute to revenue generation before becoming…
Errors and Omissions
Errors and omissions refer to unintentional mistakes or oversights in accounting records, such as misclassifications, arithmetic errors, or missing transactions.…
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