Account Assertion and Reason.

Assertion (A) : Qualitative aspects of the business unit are completely ignored from the books while preparing financial statements.
Reason (R): Window dressing refers to the practice of manipulating accounts so as to conceal vital facts, so that the financial statements may disclose a more favourable position than the actual position.

Assertion (A) : Internal users of accounting information include owners and management.
Reason (R): Internal users get accounting information by published reports of the business such a Profit & Loss Account and Balance Sheet. They also get information from unpublished reports or internal reports of the enterprise.

Assertion (A) : The main purpose of cost accounting is to ascertain total cost and per unit cost of goods produced.
Reason (R): The main purpose of financial accounting is to record the business transactions and to ascertain profit or loss and the financial position of the business.

Assertion (A) : All financial transactions relating to the business are first of all recorded in 'Ledger'.
Reason (R): Separate accounts are opened in the Ledger for purchases, sales, expenses, incomes, assets etc.

Assertion (A) : Fixed Assets are shown in the Balance Sheet at their cost and not at their realisable value.
Reason (R): Fixed Assets are shown in the Balance Sheet according to 'Historical Cost Concept'.

Assertion (A) : Accounting information must be reliable. Reliability implies that the information should be presented in such a simple and logical manner that they are understood easily by their users.
Reason (R): Accounting is influenced by personal judgements

Assertion (A) : Accounting records only the transactions of financial nature.
Reason (R) : Goods taken from the business by the proprietor for his personal use is not of financial nature and hence will not be recorded.

Assertion (A) : Owners or investors who contribute capital in the business require information regarding risk and return on their investment in the business enterprise.
Reason (R): Long term lenders require information about the ability of the enterprise to pay interest and repayment of their loans.

Assertion (A) : Accounting has a wider scope than book-keeping.
Reason (R): Book-keeping involves recording, classifying, summarizing and analysing the financial transactions.

Assertion (A) : The main objective of book-keeping is to ascertain the profit or loss and financial position of the business.
Reason (R): Book-keeping includes identifying, measuring and recording of financial transactions of the business.

Assertion (A) – Double entry system is a scientific System
Reason (R) – it helps to know the financial position of business.

Assertion (A) - There should be complete and understandable reporting on the financial statements of all significant information relating to the economic affairs of the entity.
Reason (R) – Such disclosure of material information will result in better understanding of financial statements.

Assertion (A) – Financial accounting is confined to recording of financial transactions and events in the books of account, preparation of financial statements.
Reason (R) – Financial accounting also records transactions which are of non-financial in nature.

Assertion (A) – Accounting process is carried out on the basis of the rules and principles framed by accountancy.
Reason (R) – Thus, it may be said that accountancy is knowledge of accounting and accounting is the application of accountancy.

Assertion (A) - It is not necessary to match “revenues” of the period with the expenses” of that period to determine correct profit or loss for the accounting period.
Reason (R) – Therefore, it is not relevant when the payment was made or received. All adjustments are made for all outstanding expenses and prepaid expenses.