If It Is Probable That the Judgment of a Reasonable

question 56

Multiple Choice

If it is probable that the judgment of a reasonable person will be changed or influenced by the omission or misstatement of information,then that information,which of the following (based on the definition of FASB Statement No.2) best describes that information?

• A)Insignificant.
• B)Relevant.
• C)Significant.
• D)Material.

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Definitions:

Straight-Line Depreciation

A method of allocating the cost of an asset evenly over its useful life.

Accumulated Depreciation

The total depreciation of an asset up to a single point in its life, showing how much value has been diminished over time.

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, thereby resetting the temporary accounts for the next period.

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out as dividends to shareholders, often used for reinvestment in the business or to pay debt.