With respect to the entity theory,

(a) what are the reasons for concentrating on the entity as a unit of accountability rather than on the proprietor?

(b) what is the objective of accounting?

(c) how important is the concept of 'net worth'?

(d) what is the reason for modifying the accounting equation to Assets = Equities?

(e) on what side of the equation in

(d) would retained earnings appear?

(f) why is there a stress on profit determination? (g) how do the concepts of income, expenses and profits differ from the proprietary theory? What about interest charges, dividends and income tax? (h) what are three effects on current practice?

AppendixLO1