BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Materiality concept in accounting refers to the concept that all the material items should be reported properly in the financial statements. Material items are considered as those items whose inclusion or exclusion results in significant changes in the decision making for the users of business information.

Detailed explanation-2: -Materiality is the threshold above which missing or incorrect information in financial statements is considered to have an impact on the decision making of users.

Detailed explanation-3: -A classic example of the materiality concept is a company expensing a $20 wastebasket in the year it is acquired instead of depreciating it over its useful life of 10 years. The matching principle directs you to record the wastebasket as an asset and then report depreciation expense of $2 a year for 10 years.

Detailed explanation-4: -Full disclosure principle refers to the concept that suggests that a business should report all the necessary information in their financial statements, so that the users who are able to read the financial information are in a better position to make important decisions regarding the company.