Assertion :Materiality concept refers to the state of ignoring relatively small items and values from accounts. Reason: The effort involved in allocating the cost of a small item over a long period should be justified in terms of the benefit derived from this operation. Therefore, cost of such items may be treated as expenses for the period in which they are acquired.

Both Assertion and Reason are correct and Reason is the correct explanation for Assertion.

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Both Assertion and Reason are correct but Reason is not the correct explanation for Assertion.

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Assertion is correct but Reason is incorrect.

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Both Assertion and Reason are incorrect.

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Solution

The correct option is A Both Assertion and Reason are correct and Reason is the correct explanation for Assertion.
The Materiality principle states that an accounting standard can be ignored if the net impact of doing so has such a small impact on the financial statements that a user of the statements would not be misled.

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Similar questions

Q. Assertion :As per the materiality accounting principle, the relatively small items and values should be ignored from account. Reason: The cost of the effort in the allocation of small items over a long period does not justify the benefit derived from this operation and the cost of such items is treated as expense for the period in which they are incurred.

Q. Assertion: The compressibility factor for

H_{2}

and

H e

(1 + \frac{P b}{R T})

Reason: The compressibility factor for

H_{2}

and

H e

can be derived from Van der Waal's equation.

ASSERTION: n-Pentane and n-Hexane belong to a homologous series.

REASON: n-Pentane and n-Hexane belong to the same class of hydrocarbons and they differ by a - $C H_{2}$ - group.

Assertion (A) Order of the reaction can be zero or fractional.

Reason (R) We cannot determine order from balanced chemical equation.

(a) Both assertion and reason are correct and the reason is correct explanation of assertion
(b) Both assertion and reason are correct, but reason does not explain assertion.
(c) Assertion is correct, but reason is incorrect
(d) Both assertion and reason are incorrect
(e) Assertion is incorrect but reason is correct.

Assertion (A) Rate constant determined from Arrhenius equation are fairly accurate for simple as well as complex molecules.

Reason (R) Reactant molecules undergo chemical change irrespective of their orientation during collision.

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