Materiality Is the Accounting Principle That Requires All Material Purchases

question 3

True/False

Materiality is the accounting principle that requires all material purchases to be recorded as consumables or as capital assets.

---

Definitions:

Retailer's Cost

The total expense incurred by a retailer to purchase goods for resale, including purchase price, shipping, and handling.

Maintained Markup

Maintained markup refers to the percentage difference between the retail price and the cost of goods sold, maintained over a period for the purpose of covering expenses and achieving profit margins.

Retailer's Cost

The purchase price paid by retailers to obtain products for sale, excluding any additional expenses like shipping or handling.

Markup

The amount added to the cost price of goods to cover overhead and profit; the selling price minus the cost.