Question

Cost of a calculator will be treated as expense in that particular year in which it is purchased although it may be used for 3-4 years. This is in accordance to the concept of: *

1 point


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Answer 1

Answer:

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Answer 2

The cost of a calculator will be treated as an expense in that particular year in which it is purchased although it may be used for 3-4 years. This is in accordance to the concept of Materiality.

Explanation:

• The convention of materiality anticipated that in accounting only those transactions will be evaluated which have a substantial impact on the financial standing of the organization and other dealings which have unimportant effect will be ignored.  

• The materiality concept denotes a situation where the financial data of a company is studied to be material from the point of view of the provision of the financial statements if it has the aptitude to alter the opinion or view of a reasonable person.