The concept of the reporting entity is a fundamental accounting concept, one that pervades all of accounting.
Required:
1. What is a reporting entity? Explain why the reporting entity concept is so fundamental that it pervades all of accounting.
2. For each of the following, indicate whether the accounting concept of reporting entity can be applied. Discuss and give illustrations.
a. A unit created by or under law
b. The product-line operating segment of an enterprise
c. A combination of legal units and/or product-line operating segments
d. All of the activities of an owner of a company
e. An industry
f. The economy of the United States