Solon Corporation has adopted the policy of charging to expense at the time of purchase all assets having a cost of less than $100, regardless of the life expectancy of the asset.This policy is most closely related to the
A)historical cost principle
B)period-of-time assumption
C)verifiability principle
D)materiality principle

Question

Quizplus · Accepted Answer

Solon Corporation's policy of charging to expense assets costing less than $100 regardless of their life expectancy is a practical application of the materiality principle. This principle suggests that an accounting treatment should be adopted based on the materiality of the item. If an item is immaterial, it can be accounted for in a simplified manner, as in the case of Solon Corporation's policy.

Solon Corporation Has Adopted the Policy of Charging to Expense