Which financial statement assumption relates to the procedure where a $200 paper shredder with a 5-year useful life is treated as an expense?
A) monetary
B) accounting period
C) materiality
D) historical cost.

Question

Quizplus · Accepted Answer

The materiality assumption allows businesses to expense small costs like a $200 paper shredder immediately, rather than capitalizing and depreciating them over their useful life, because the amount is not significant enough to impact financial statements.

Which Financial Statement Assumption Relates to the Procedure Where a $200