Abstract

The concept of business entity in accounting practices which defines business as a separate entity from the owner brings forth stewardship reporting and accountability in any organization.  Mores, the going concern concept anticipates a continuous life a firm within a foreseeable future.  That is why the ultimate determine of the remain perpetually. Moreover, the aim or objective of financial manager is to provide meaningful financial information about business enterprises to the outside world and for internal control and management in decision making.  These financial information are presented in financial statement.  They are means of conveying to the management interested outside a concise picture of the profitability and financial position of a business.  They constitute a report of managerial performance attesting to the managerial success or failure and flashing warning signal of inpending difficulties.  (Meigs and meigs 1979), so financial statement obviously important to enable the users that have a clear picture of the position of organization.  It reports the liquidity and solvency of the company and the claim of these resources i.e debt owned, the equity of the owner and presents cash present cash position of the company.