The concept of materiality requires a large company to record the purchase of a $10 wastepaper basket as an asset and depreciate it over its useful life.

Question

Quizplus · Accepted Answer

The concept of materiality implies that insignificant transactions or events need not be recorded to treat them as immaterial. A $10 wastepaper basket is not considered material, and therefore, it need not be recorded as an asset and depreciated over its useful life.

The Concept of Materiality Requires a Large Company to Record