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Equity
The value of an ownership interest in property or a business, calculated as total assets minus total liabilities; represents what the owners' claim on the assets is.
Entity Assumption
The accounting principle that treats a business as a separate legal and accounting entity, distinct from its owners, managers, or operators.
Historical Cost Principle
An accounting principle that assets should be recorded and reported at their original purchase cost.
Going-Concern Assumption
An accounting principle assuming that a company will continue to operate indefinitely and not go bankrupt, impacting financial decisions and reporting.
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