What is Convention of materiality
Briefly describe the term convention of materiality?
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This convention proposes that while accounting for the different transactions, those transactions will be considered that have material impact on financial status or profitability of the organization and other unimportant transactions will be ignore. In keeping with the principle of materiality, unimportant items are either let out or combined with other items. Sometimes, these items are shown as footnotes, or in parentheses as per to their relative significance.
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