Friday, July 11, 2008

What is Accounting Materiality Concept

What is Accounting Materiality Concept?

  • It is the importance of an accounting transaction or item that determines if it is necessary to include it in the general ledger and accounting statements.

  • Insignificant events do not need to be recorded in the books.

For example, buying a pencil in a small business. Size of a company and revenue has an impact on the accounting materiality concept.

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