●States that financial accounting information relates only to the activities of the busin ess entity and not to the activities of its owner.

●The business entity is treated as separate from its owners.

☆Financial Statements include:

- a statement of financial position at the end of the period

- a statement of comprehensive income for the period

- a statement of changes in equity for the period

- statement of cash flows for the period

- notes, comprising a summary of accounting policies and other explanatory notes

The statement of financial position:

Statement of Financial Position: showing the financial position of a business at a poin t of time. The Vertical format of the SFP: (Statement of Financial Position as at 31 December 2007)

●The top half of the balance sheet shows the assets of the business.

●The bottom half of the balance sheet shows the capital and liabilities of the busines s.

A Statement of financial position at the end of the period (Balance Sheet): W Xang Balance Sheet as at December 31 20X6

The horizontal format of the SFP: (Statement of Financial Position as at 31 Decembe r 2007)

●The left half of the balance sheet shows the assets of the business.

●The right half of the balance sheet shows the capital and liabilities of the business.

W Xang

 Statement of Financial Position as at 31 December 20x6