Accounting entity is the business entity in which we keep record all the business transactions. Without recording, business will not give or take anything for businessman's personal use. Accounting entity clears that business is different from businessman. For showing correct financial statements, it is necessary to record each transaction.
If businessman takes Rs. 100,000 for his wife's shopping, it should be in record as per accounting entity principle because it reduces the capital of businessman. So, low capital will not sufficient for better business. So, it is need to record and manage extra capital for business.
If businessman takes Rs. 100,000 for his wife's shopping, it should be in record as per accounting entity principle because it reduces the capital of businessman. So, low capital will not sufficient for better business. So, it is need to record and manage extra capital for business.
