Charging off equipment that cost less than $20 would be an example of the application of:
A)going concern.
B)cost.
C)matching.
D)materiality.
E)realization.

Question

Quizplus · Accepted Answer

Materiality refers to the concept that certain items, such as those with a low cost, may not have a significant impact on the financial statements and therefore, may not require the same level of scrutiny or reporting. Charging off equipment that costs less than $20 would be an example of materiality because the cost of such equipment is immaterial and may not warrant the time and effort required to track and report it.

Charging Off Equipment That Cost Less Than $20 Would Be