Question

2. Charging off equipment that cost less than $200 would be an example of the application...

2. Charging off equipment that cost less than $200 would be an example of the application of:

a.

going concern.

b.

cost.

c.

matching.

d.

materiality.
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Answer #1

In any financial accounting statements, there are some transactions that are too small to be recognized and such transactions might not have any impact on the analysis of the financial statement by an external observer; removal of such irrelevant information to keep the financial statement crisp and consolidated is called as the concept of materiality.

As the equipment costs less than $200, this an example of the application of the concept of materiality.

Hence, the correct answer is Option D (Materiality).

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