O-LevelAccountingAccounting principles and policies7707/11 · Oct/Nov 2011 · Q291 Mark

A sole trader and a large limited company purchase identical office equipment. The sole trader treats it as a non-current asset and the limited company treats it as an expense. Which accounting principle is being applied?

Aaccounting entity

Bmateriality

Cmoney measurement

Dprudence

✓ Correct answer

B: materiality

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Topic: Accounting principles and policies, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, Oct/Nov 2011 Paper 1 Variant 1, question 29.

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A sole trader and a large limited company purchase identical office equipment. The sole trader treats it as a non-current asset and the limited company treats it as an expense. Which accounting principle is being applied?

✓ Correct answer

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