explain each of the following in 50 words: 1. Varifiable objective evidence assumption 2. Principal of materiality 3. Principal of full disclosure 4. practice in industries
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Answer:
1)This principle requires that each recorded business transactions in the books of accounts should have an adequate evidence to support it. For example, cash receipt for payments made. The documentary evidence of transactions should be free from any bias.
2)The materiality principle states that an accounting standard can be ignored if the net impact of doing so has such a small impact on the financial statements that a reader of the financial statements would not be misled.
3)The full disclosure principle is a concept that requires a business to report all necessary information about their financial statements and other relevant information to any persons who are accustomed to reading this information.
4)Industrial and commercial practices are process-based activities that enable manufacturers to make cost-effective products at a profit. Industrial practices include manufacturing and designing activities, used to ensure the production of high quality products for specific market groups.
Explanation:
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