ENTITY THEORY Definition

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ENTITY THEORY is where a legal entity is regarded as having a separate existence from the owners. The financial statements are prepared from the perspective of the entity, not its owners. See PROPRIETARY THEORY.

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REVENUE EXPENDITURE is the cost of resources consumed or used up in the process of generating revenue, generally referred to as expenses.

PRIOR PERIOD refers to accounting periods that have occurred in the past. See also ACCOUNTING PERIOD.

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