📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    A company decides not to record a calculator worth

    Rs.500 as a fixed asset and instead expenses it off. Which accounting concept is being applied?
    A Conservatism Correct Answer Incorrect Answer
    B Consistency Correct Answer Incorrect Answer
    C Materiality Correct Answer Incorrect Answer
    D Matching Correct Answer Incorrect Answer
    E Cost Principle Correct Answer Incorrect Answer

    Solution

    Under the Materiality concept, items of small or insignificant value that do not affect the true and fair view of financial statements can be written off as expenses instead of capitalizing. The calculator's cost is low, so treating it as an expense is justified.

    Practice Next
    More Basic Accounting Concepts Questions

    Relevant for Exams:

    ask-question