Prudence

Prudence is the ability to govern and discipline oneself by the use of reason. It is
classically considered to be a virtue, and in particular one of the four Cardinal virtues. 
The business entity concept states that the transactions associated with a business must be
separately recorded from those of its owners or other businesses. Doing so requires the use of
separate accounting records for the organization that completely exclude the assets and
liabilities of any other entity or the owner.

What do you mean by business entity?

A business entity is an organization created by one or more natural persons to carry
on a trade or business. ... Some business entities are considered for federal tax
purposes to be not separate from its owner. Such is the case with single-member
limited liability companies and sole proprietors

What is the entity principle in accounting?

The economic entity principle. The economic entity principle states that the recorded
activities of a business entity will be kept separate from the recorded activities of its
owner(s) and any other business entities

What does entity mean in accounting?

In accounting, a business or an organization and its owners are treated as two
separately identifiable parties. This is called the entity concept. The business stands
apart from other organizations as a separate economic unit.

Is a sole trader an accounting entity?

However in sole trader, the owner is the legal entity of the business. For instance a
hawker is sued if his food is dirty. Coz' that’s sole trader. Accounting entity simply
means all companies and owner have their own financial recordings

A historical cost is a measure of value used in accounting in which the

price of an asset on the balance sheet is based on its nominal or
original cost when acquired by the company. The historical-cost method
is used for assets in the United States under generally accepted accounting
Why is historical cost concept important?
The concept of historical cost is important because market values change so often
that allowing reporting of assets and liabilities at current values would distort the whole
fabric of accounting, impair comparability and makes accounting information
unreliable.
principles (GAAP)