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JAMB Principles of Accounts 2006 Question 26

Question 26

Accounting Concepts and Conventions

Stationary which will be used over a long period of time is usually recorded as an expense instead of an asset. This concept is called

  1. A.entity
  2. B.materiality
  3. C.realization
  4. D.accrual.
Show the answer and explanation

Answer: B (materiality)

Explanation

Materiality: small items are expensed at once because treating them as assets would not change users' decisions.