Hunsinger Enterprises purchases many small pieces of office furniture,such as trash cans,that cost less than $100 each.The company accounts for these items as expenses when acquired rather than reporting them as property,plant,and equipment on its balance sheet.The company's accountant states that no accounting principle has been violated.Justification for expensing these furniture items is based on cost vs.benefit considerations as well as the accounting constraint of

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The justification for expensing these small pieces of office furniture is based on the accounting constraint of materiality. Materiality states that an item can be treated as an expense rather than property, plant, and equipment if the cost is not significant enough to impact the financial statements. Since the cost is less than $100 each, it is not significant enough to impact the financial statements, and therefore can be expensed.

Hunsinger Enterprises Purchases Many Small Pieces of Office Furniture,such as Trash