Q405
The cost of a small calculator is treated as an expense and not shown as an asset in a financial statement of a business entity due to
A.
Materiality concept
AnswerB.
Matching concept
C.
Periodicity concept
D.
Conservatism concept
Answer: Option A
Solution
Answer: Option A
Solution:
The cost of a small calculator is treated as an expense and not shown as an asset in a financial statement of a business entity due to Materiality concept. The materiality concept refers to a situation where the financial information of a company is considered to be material from the point of view of the preparation of the financial statements if it has the potential to alter the view or opinion of a reasonable person.