Identify the accounting concept or principle that relates to the statement in each of the following questions:
-If a particular item is,by reason of its nature or its size,significant to a proper understanding of the situation,it should be separately stated.
A) relevance
B) reliability
C) materiality
D) prudence.

Question

Identify the accounting concept or principle that relates to the statement in each of the following  questions:
-If a particular item is,by reason of its nature or its size,significant to a proper understanding of the situation,it should be separately stated.
A) relevance
B) reliability
C) materiality
D) prudence.

Quizplus · Accepted Answer

The accounting concept that relates to the statement is materiality. Materiality means that any information or item that may affect the decision of the user of the financial statements should be disclosed. Therefore, if an item is significant to a proper understanding of the situation, it should be separately stated.

Identify the Accounting Concept or Principle That Relates to the Statement