Question

what is an accounting entity ?

what are the two most crucial aspectd of this accounting entity concept ?

Answer 1

Accounting entity is an entity for which the accounting records are required to be preapared. Nowadays all the bussiness concerns for one or endless reasons are required to maintain their accounting records.

The two most crucial aspects of accounting entity concept are as follows

1 DISTINCTION OF ENTITY AND IT'S OWNERS

The accounting entity concept assumes that the entity and owner are two different persons. For example the personal expenses and incomes of the owner are not recorded in accounting records of it's entity. The entity is assumed to be a different person.

2 RECORDS ONLY FINANCIAL TRANSACTIONS OF THE BUSSINESS

The accounting records of entity records only the transactions of the bussiness that are in financial terms. The qualitative aspects of bussiness are ignored and thus only quantitive factors are considered that pertains to bussiness.

However apart from above two there are various concepts like GOING CONCERN CONCEPT, MONEY MEASUREMENT CONCEPT, DUAL CONCEPT, COST CONCEPT, MATCHING CONCEPT, ACCOUNTING PERIOD CONCEPT ETC.