Auto Kool has implemented a policy that requires all tools expenditures below $100 to be expensed. This is an application of
A) the matching principle.
B) the materiality constraint.
C) the full disclosure principle.
D) representational faithfulness.

Question

Quizplus · Accepted Answer

The materiality constraint allows for the expensing of small amounts that would not significantly impact financial statements, to simplify accounting processes. Auto Kool's policy reflects this by not capitalizing small tool expenditures.

Auto Kool Has Implemented a Policy That Requires All Tools