Question

The accounting entity may be _________.

• A. The business unit itself or a defined part of business
• B. An amalgamation of related business
• C. Both (A) and (B)
• D. None of the above

Answer 1

Answer: (C)

Both (A) and (B)

An accounting entity is an economic unit that isolates the accounting of certain transactions from other subdivisions or accounting entities. It provides information to the management for decision making. It may be the business unit itself or a defined part of business or an amalgamation of related business.