Accounting · Accounting Concepts and Conventions
Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: The guidelines of Materiality and Conservatism are categorized as fundamental Accounting Concepts because they represent the self-evident theoretical truths on which all accounting entries are based. Reason R: In the accounting framework, Concepts are the theoretical foundations treated as fundamental assumptions, while Conventions are practical rules and traditions developed through usage to ensure consistency and comparability. In the light of the above statements, choose the most appropriate answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both A and R are correct and R is the correct explanation of A
- 2Both A and R are correct but R is NOT the correct explanation of A
- 3A is correct but R is not correct
- 4A is not correct but R is correct✓
Correct answer
A is not correct but R is correct
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