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WAEC Financial Accounting 2014 Question 39

Question 39

Accounting Concepts and Conventions

The accounting concept which states that expenditure involving insignificant amounts should be regarded as expenses and not assets is

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

Answer: B (materiality.)

Explanation

Under the materiality concept, small items (e.g. a stapler) are simply written off as expenses even if they last long.