Button Transportation purchases many pieces of office furniture with an individual cost below $200 each.Button chooses to account for these expenditures as expenses when acquired rather than reporting them as property, plant, and equipment on its balance sheet.The company's accountant and independent CPA agree that no accounting principle has been violated.What accounting justification allows Button to expense the furniture?
A)Conservatism
B)Matching
C)Materiality
D)Verifiability

Question

Quizplus · Accepted Answer

The accounting justification that allows Button to expense the furniture is materiality. Materiality principle allows for the expenses to be treated as immaterial and expensed, rather than recording them as assets on the balance sheet. Since the individual cost of each piece of furniture is below $200, they are considered immaterial expenditures for Button Transportation.

Button Transportation Purchases Many Pieces of Office Furniture with an Individual