The cost of a small calculator is treated as an expense and not shown as an asset in a financial statement of a business entity due to

A. Materiality concept

B. Matching concept

C. Periodicity concept

D. Conservatism concept

Answer: Option A

Solution(By Examveda Team)

The cost of a small calculator is treated as an expense and not shown as an asset in a financial statement of a business entity due to Materiality concept. The materiality concept refers to a situation where the financial information of a company is considered to be material from the point of view of the preparation of the financial statements if it has the potential to alter the view or opinion of a reasonable person.