accounting concepts

separete entity concept:
accounts are kept for entities, as distinguished from the person who are associated with these entities . in recording events in accounting , the importent question is : ''how do these events affect the entity ? how they affect the persons who own , operate , or otherwise are associated with the entity is irrelevant. For example when a person invest Rs 200.000 into business
it will be deemed that the owner has given that money . to the business which will be shown as a liability in the books of the business.in case the owner withdraws RS.170,000
The Concept of separate entity is applicable to all forms of business organazation , Forexample , In case of a sole proprietorship or partnership business Though the sole propritership and patner are not considered as separate entities in the eyes of law , but for accounting purpose they will be considered as separate entities.
Going Concern Concept:
according to this concept it is assumed that an entity is a oing concern ----That it will continue to operate for an indefinite time period there is no intention to liqrate the particular business venture in the foreseeable future.On account of this concept , the accountant while valuin the asset does not take into account the sale value of assets . moreover , he chares deprecation on fixed assets on the basis of their expected life rather than on their markets values.
For example.
suppose that a company has just purchased a three- year insurance policy for Rs45,000 , if we assume that the business will continue in operation