According to this concept, the task of measuring income and wealth is undertaken by accounting, for an identifiable unit or entity. The unit or entity so identified is treated different and distinct from its owners or contributors. In law the distinction between owners and the business is drawn only in the case of joint stock companies but in accounting this distinction is made in the case of sole proprietor and partnership firm as well. It has also led to the development of “responsibility accounting” which enables us to find out the profitability of even the different sub-units of the main business.
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