“lhe legal viewpoint has different interpretation in different types of business organization, In case of sole __ gperprises and partnership, the entity of businessman (the owner) and that of the business organization <> isnot considered separate from each other; the, implication of which is that in case business property is not sufficient to pay off business liabilities then the personal property of the owner can be used to fulfil business © losses. This results into unlimited liability for the owner of the business. In case of a limited liability _ company (LLC), the entity (existence) of owners, i.., the shareholders is considered separate from the entity + ofthe company that implies even in case of losses in the company, the personal property of the shareholders : i.be used to fulfill business losses. This results into the limited liability of shareholders, the liability of {shareholders is up to the value of shares purchased by them. - | incase of sole enterprise and partnership the entity of owner and business enterprise is same from legal ‘viewpoint, whereas for LLC itis separate from each other. | Money Measurement Concept ‘Actransaction is nothing but the exchange of commitment between two or more parties resulting into ‘monetary/non-monetary implications. By monetary transactions, we mean the transactions that can be ‘measured in money value and the monetary implications of such transaction can be calculated precisely. In the books of accounts, only monetary transactions are recorded, that too at historical cost only. Ia ys Going Concern Concept Going concern concept enforces that once a business is started, the businessman (owner) foresees to continue it,fora significantly longer time period that might even be an infinite time period. This fundamental helps in ‘the classification of different assets into fixed assets and current assets. Due to this concept, fixed assets are not shown as direct expense; rather depreciation is charged on the fixed assets so as to provide for the replacement of the assets in future. The concept of going concer also helps in recording and presenting different assets, particularly fixed asset it their cost, irrespective of the market price of such assets on the date of presentation in the balance shget. This concept is also called mother concept as it gives birth to cost concept. Cost Concept Financial accounting is considered as a mechanism for recording only historical ‘monetary transactions in the books of accounts. Due to this, it is sometimes called Postmortemv/investigation of the historical monetary transactions. All the transactions are recorded at the cost for the transaction, irrespective of the market price/value of the transaction. Dual Aspect Concept Every monetary transaction affects a minimum of two accounts/aspects, and value wise magnitude of this effect on both the accounts is equal. The dual aspect concept helps in establishing the principle of matching