Question

Current liabilities are normally recorded at the amount expected to be paid rather than at their present value. This practice can be supported by GAAP according to the concept of:

Answer 1

Answer: Materiality

Explanation:

The concept of materiality states that one can ignore an accounting standard in cases whereby the net impact felt has a little effect on the financial statement of the company.

Current liabilities are normally recorded at the amount expected to be paid rather than at their present value. This practice can be supported by GAAP according to the concept of materiality.