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WAEC Financial Accounting 2010 Question 27

Question 27

Accounting Concepts and Conventions

The accounting principle that states that insignificant expenditures are not to be taken into account is the

  1. A.realization concept
  2. B.materiality convention
  3. C.matching concept
  4. D.consistency convention
Show the answer and explanation

Answer: B (materiality convention)

Explanation

Materiality says items too small to affect users' decisions need not be treated strictly (e.g. a stapler is expensed).