Chapter 2 - A Further Look at Financial Statements - Questions - Page 74: 16

1) Materiality and conservatism. 2) Materiality is the statement's impact on company's overall financial condition and operations.

1) The two constraints inherent in the presentation of accounting information are materiality and conservatism. 2)Conservatism is choosing the accounting method that will be least likely to overstate the assets or income.