A Stapling Machine,costing $25 with a Useful Life of 5

question 18

Multiple Choice

A stapling machine,costing $25 with a useful life of 5 years,is treated as a stationery expense rather than as an asset.To what financial statement assumption does this relate?

• A) materiality
• B) monetary
• C) accounting period
• D) accounting entity.

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Definitions:

Future Value

The value of an investment at a specific future date, considering compound interest or returns.

Interest Rate

The cost of borrowing money or the compensation for the service and risk of lending money, expressed as a percentage of the principal loan amount.

Cash Flows

The movement of funds into and out of a business, project, or financial product, reflecting operational, investment, and financing activities.

Annuity

A financial product that pays out a fixed stream of payments to an individual, typically used as an income stream for retirees.