An accounting entity is an independent accounting unit. A business is treated as a separate entity to avoid conflating its accounts with that of the owners.
An accounting entity refers to an economic unit that can be taken as an independent unit for accounting purposes, so that its accounts may be assessed separately from related departments and organizations.
Any unit that is amenable to independent accounting is an accounting entity, be it an autonomous corporation, a sole proprietorship, or even a subsidiary of a firm. The accounting entity needs to maintain a separate account that records all its exclusive assets and liabilities.
A business needs to be treated as a separate entity for accounting purposes so that its transactions and financial condition is kept separated from that of its owners. It is particularly relevant for arrangements like sole proprietorship in which there is difficulty in separating the matters of the owner and the business entity.
To learn more about accounting : brainly.com/question/14688198
#SPJ4
