Which of the following is NOT one of the four general accounting principles?

• A. Historical Cost Principle
• B. Materiality Principle
• C. Matching Principle
• D. Revenue Recognition Principle

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of accounting principles. Accounting principles are the fundamental guidelines that govern the preparation and presentation of financial statements. They ensure consistency, reliability, and comparability of financial information.
2. Step 2: Review the four general accounting principles mentioned in the problem: Historical Cost Principle, Materiality Principle, Matching Principle, and Revenue Recognition Principle.
3. Step 3: Define each principle briefly: - Historical Cost Principle: Assets are recorded at their original purchase price. - Materiality Principle: Information is considered material if its omission or misstatement could influence the decision-making of users. - Matching Principle: Expenses are recognized in the same period as the revenues they help generate. - Revenue Recognition Principle: Revenue is recognized when it is earned and realizable, not necessarily when cash is received.
4. Step 4: Identify which principle is NOT one of the four general accounting principles. The Materiality Principle is a concept used in accounting but is not classified as one of the four general accounting principles.
5. Step 5: Conclude that the correct answer is the Materiality Principle, as it does not belong to the four general accounting principles listed in the problem.