Juan is a meticulous accountant and wants to make sure every

Juan is a meticulous accountant and wants to make sure everything is allocated correctly in its own line item or account. However, he also observesGAAP. According to which principle would he not use a separate account for a$10 expense for purchasing plastic forks, plates, and napkins for the annualo²ce Christmas party?

Solution

Materiality principle says the effect of other accounting principle can be ignored when there is no effect on the users of the financial statements.

Since 10 expense is not material to users of financial statements, no separate account is required.