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7 April, 2016 - 15:12

The business entity concept states that each business entity is a legal entity on its own. That's a business is different from the owner, the promoter or the investors. A business should have its own separate Account statement from the owner of the business. Basically,a business financial statement has the following major heading , Assets, Liabilities, and Owner's Equity which should be reported at as a specific date or period. It should be noted, however, that in some circumstances the investors or owners of a business are legally liable for debts or damages arising from the day to day operation of the business. This liability depends upon the legal form of the business. In the event an individual owns more than one unrelated business, each business must also be treated as a separate entity.