Entity concept

Entity concept

[In accounting the separate entity concept"' treats a business as distinct and completely separate from the owners. The business stands apart from other organizations as separate economic unit. It is necessary to record the business transactions separately to distinguish it from the owner's personal transactions.This concept is now extended to accounting for various divisions of a firm in order to ascertain results for each division.

The idea here is that the financial transactions of one individual or a group of individuals must be kept separate from any unrelated financial transactions of those same individuals or group.

The best example here concerns that of the sole trader or one man business: in this situation you may have the sole trader taking money by way of 'drawings': money for his own personal use. Despite it being his business and apparently his money, there are still two aspects to the transaction: the business is 'giving' money and the individual is 'receiving' money.

So, the affairs of the individuals behind a business must be kept separate from the affairs of the business itself.

]


Wikimedia Foundation. 2010.

Игры ⚽ Поможем написать курсовую

Look at other dictionaries:

  • entity concept — See accounting entity …   Big dictionary of business and management

  • business entity concept — UK US noun [S] ACCOUNTING ► the idea that in accounting (= the work of preparing financial records) a business or organization is completely separate from the personal business of the people who own it or work in it: »The business entity concept… …   Financial and business terms

  • concept — con‧cept [ˈkɒnsept ǁ ˈkɑːn ] noun 1. [countable] MARKETING an idea for a product: • the management of an R&D process, from an original concept through to marketing, manufacture and end use ˈmarketing ˌconcept [countable] MARKETING an idea for a… …   Financial and business terms

  • separate-entity concept — See: accounting entity …   Accounting dictionary

  • separate-entity concept — See accounting entity …   Big dictionary of business and management

  • Entity–attribute–value model — (EAV) is a data model to describe entities where the number of attributes (properties, parameters) that can be used to describe them is potentially vast, but the number that will actually apply to a given entity is relatively modest. In… …   Wikipedia

  • Entity-attribute-value model — (EAV), also known as object attribute value model and open schema is a data model that is used in circumstances where the number of attributes (properties, parameters) that can be used to describe a thing (an entity or object ) is potentially… …   Wikipedia

  • entity — [n1] object that exists article, being, body, creature, existence, individual, item, material, matter, organism, presence, quantity, single, singleton, something, stuff, subsistence, substance, thing; concept 433 Ant. abstract, concept, idea… …   New thesaurus

  • Concept-oriented model — Example of a concept oriented model. The concept oriented model (COM) is a data model based on the following three principles: Duality principle postulates that any element consists of two parts, called identity and entity. Accordingly, data… …   Wikipedia

  • Entity-relationship model — A sample Entity relationship diagram using Chen s notation In software engineering, an entity relationship model (ERM) is an abstract and conceptual representation of data. Entity relationship modeling is a database modeling method, used to… …   Wikipedia

Share the article and excerpts

Direct link
… Do a right-click on the link above
and select “Copy Link”