ENTITY ASSUMPTION Definition

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ENTITY ASSUMPTION is the assumption that financial statements are prepared for an entity that is separate and distinct from its owners.

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DEVIATION is the departure from prescribed internal control. Often expressed as a rate at which the departure occurs.

WORKING CAPITAL DAYS OF NET SALES measures how many days of net revenue are tied up in working capital. It is calculated: Working Capital Days of Net Sales = Working Capital / Net Revenue * 365. Low values tend to show problems in ability to support sales while high values may indicate under-capitalization problems.

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