define accounting, materiality, accrual and equity and also ancome statement?

Question

pls ..... answer this

Answer 1

According to the Committee on Terminology of American Institute of Certified Public Accountants (AICPA), “Accounting is the art of recording, classifying and
summarizing in a significant manner and in terms of money, transactions and events which are in part at least, of a financial character, and interpreting the results thereof”.

IAS 1 states:
Material - Omissions or misstatements of items are material if they could, individually or collectively, influence the economic decisions of users taken on the basis of the financial statements. Materiality depends on the size and nature of the omission or misstatement judged in the surrounding circumstances. The size or nature of the item, or a combination of both, could be the determining factor.

IAS 1.29 to 31 states:
29. Each material class of similar items shall be presented separately in the financial statements. Items of a dissimilar nature or function shall be presented separately unless they are immaterial.
30. Financial statements result from processing large numbers of transactions or other events that are aggregated into classes according to their nature or function. The final stage in the process of aggregation and classification is the presentation of condensed and classified data, which form line items on the face of the balance sheet, income statement, statement of changes in equity and cash flow statement, or in the notes. If a line item is not individually
material, it is aggregated with other items either on the face of those statements or in the notes. An item that is not sufficiently material to warrant separate presentation on the face of those statements may nevertheless be sufficiently material for it to be presented separately in the notes.
31. Applying the concept of materiality means that a specific disclosure requirement in a Standard or an Interpretation need not be satisfied if the information is not material.

Accruals -
Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense.

Equity -
Ownership interest in a corporation in the form of common stock or preferred stock. It also refers to total assets minus total liabilities, in which case it is also referred to as shareholder's equity or net worth or book value.

Income statement -
In the context of corporate financial reporting, the income statement summarizes a company's revenues (sales) and expenses to arrive at the net profit or loss. Income statements come with various monikers. The most commonly used are "statement of income", "statement of earnings", "statement of operations" and "statement of operating results". Many professionals still use the term "P & L", which stands for profit and loss statement, but this term is seldom found in print these days. In addition, the terms "profits", "earnings" and "income" all mean the same thing and are used interchangeably.