accounting gaaps
Updated: 3/29/2021
accounting gaaps

Storyboard Text

  • What's that?
  • Okay! Let's move on to the principle of materiality.
  • The principle of materiality states that we, as an organisation, have to fully disclose our monetary situation.
  • Here's a graph that shows our assets! This is information that can be accessed by the government and our shareholders.
  • Ann's Accounting Firm - Monetary Situation
  • Assets of Ann's Accounting Firm
  • This is another example of the principle of materiality. These banks here have released their assets as public information for anyone to see.
  • Oh! So basically, this principle makes sure that an organisation has their monetary situation available.
  • Yep! That's it. It makes sure that shareholders have the information they need to make any decisions.
  • What principle is next?
  • Hmm... how about we talk about the principle of prudence? It makes sure that accountants don't speculate when creating financial statements.
  • Let's use these books as an example. Although they cost $1,200 on the current market, they cost $1,000 to buy. Therefore, our assets would be recorded down as $1,000.
  • $1200
  • $1000