Question

Q3. Explain the principle
of Materiality and Conservatism:
​

Answer 1

Explanation:

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.

Answer 2

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the principle of Materiality

The materiality principle expresses that a company may violate another accounting principle if the amount in question is small enough that the financial statements will not be misleading. Starting and maintaining solid, professional accounting practices is essential for the growth of a business.

the principle of Conservatism

In accounting, the convention of conservatism, also known as the doctrine of prudence, is a policy of anticipating possible future losses but not future gains. in accounting, it states that when choosing between two solutions, the one that will be least likely to overstate assets and income should be selected.