book keeping

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Materiality principle in accounting

Materiality principle: This principle requires that the items or events having an insignificant economic effect or not being relevant to the user’s need not be disclosed. In other words, only significant items should be considered when preparing financial statements.

Significant (material) items are those items whose omission or nondisclosure will result in misleading the users of those financial statementsRead the rest

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Chart of accounts – meaning

Chart of accounts is an index to the accounts in the general and subsidiary ledgers. Ledger account are classified into five group of account. Chart of accounts is an index to place these five group of of accounts into an order, to assist into locating ledger accounts which allow for the accounts to be easily accessed.

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