Materiality is the accounting principle that requires all material purchases to be recorded as consumables or as capital assets.

Question

Quizplus · Accepted Answer

Materiality is the accounting principle that determines the significance of financial information and whether its omission or misstatement would influence the decision-making of users. It does not specifically require all material purchases to be recorded as consumables or as capital assets; rather, it guides what information must be included in financial statements based on its relevance and impact.

Materiality Is the Accounting Principle That Requires All Material Purchases