Showing purchased office equipments in financial statements is the application of which accounting concept?

Historical cost convention

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Materiality

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Prudence

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Matching concept

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Solution

The correct option is B Materiality
According to the materiality convention, the business must report all the transactions which are of material nature and ignore the insignificant items. The firm has to make a distinction between the material and immaterial matters.
Purchase of office equipment is a material in nature and to be shown in the financial statement.

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