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1TITLE: INTRODUCTION TO FINANCIAL ACCOUNTING4 CONCEPTS

Members of groupAhmad Adib bin AzlanMuhammad Iqbal bin MuslihatMuhammad Nabil Fitri bin ZulazliMuhammad Adib Zikri bin SaraniMuhammad Izwan bin Zainal 8COMPARABILITY CONCEPTCONSISTENCY CONCEPT NEUTRALITY CONCEPTMATERIALITY CONCEPT

9COMPARABILITYHE QUALITYCOMPARABILITY MEANS THE QUALITY OF THE INFORMATION IS SUCH THAT USERS CAN IDENTIFY DIFFERENCES AND SIMILARITIES AMONG COMPANIES THEY ARE EVALUATING OR AMONG DIFFERENT FINANCIAL PERIODS FOR THE SAME COMPANY.. FOR EXAMPLE , USERS NEED TO KNOW WHAT PARTICULAR GAAP THE DIFFERENT COMPANIES THEY ARE EXAMINING ARE USING TO DEPRECIATE THEIR ASSETS. WITHOUT THIS KNOWLEDGE , THE USERS CANNOT ACCURATELY EVALUATE THE RELATIVES WORTH OF ONE COMPANY OVER THE OTHERCONSISTENCY CONCEPTSTHIS CONCEPTS DEALS WITH CONSISTENT USE OF ACCOUNTING BASIC OR METHODS,FOR EXAMPLE ONE OF BUSINESS HAS ADOPTED THE STRAIGHT LINE METHOD OF CALCULATING DEPRECIATION,THIS METHOD SHOULD BE USED BOTH WITHIN ONE ACCOUNTING PERIOD TO ANOTHER.NEUTRALITY CONCEPTINFORMATION CONTAIN IN THE FINAL STATEMENT MUST BE FREE FROM THE BIAS.IT SHOULD REFLECT ABALANCED VIEW OF THE AFFAIRS OF THE COMPANY WITHOUT ATTEMPTING TO PRESENT THEM IN FAVOUR LIGHT.INFORMATION MAY BE DELIBERATELY BIASED OR SYSTEMATICALLY BIASED.MATERIALITY CONCEPTTHE RECORDING OF A ASSETS AND LIABILTY DOES NECCESARILY REQUIRE A STRICT ADHERENCE TO ANY OF THE ACCOUNTING PRINCIPLES IF IT IS EXPENSIVE,AS LONG AS IT DOES NOT MATERIALITY OR SIGNIFICANTLY AFFECT THE REPORTED NET INCOME OF THE BUSINESS IN THE OTHER WORDS OF TRIVIAL ITEMS IN A SPECIAL WAY ALLOWED .IF A TRANSACTION IS CONSIDERED TO BE MATERIAL,IT SIGNIFICANTLY AFFECTS THE REPORTED NET INCOME OF THE BUSINESS.14Thank-you!