Which of the following is an example of using the materiality concept?
A)recording significant purchases as assets even though technically they are considered expenses
B)recording insignificant purchases as expenses even though technically they are considered assets
C)not recording insignificant purchases at all
D)recording insignificant liabilities as assets

Question

Quizplus · Accepted Answer

The materiality concept in accounting allows for ignoring the strict rules of accounting when the impact of the financial information is not significant enough to influence the decision-making process of users. Option B, recording insignificant purchases as expenses even though technically they might be considered assets, is an application of this concept. It simplifies the accounting process for items that do not materially affect financial statements.

Which of the Following Is an Example of Using the Materiality