Question

What is convention of materiality? Explain in very short.

Answer 1

Answer .) Items having an insignificant effect or being irrelevant to the users of financial statements need not to be disclosed .

Answer 2

b)Convention of Materiality

This accounting convention proposed that while accounting only those transactions will be considered which have material impact on financial status of the organization and other transactions which have insignificant effect will be ignored.. It gives relative importance to an item or event.