Information That Is Material Means That an Error in Recording

question 56

Multiple Choice

Information that is material means that an error in recording the dollar amount of a transaction would

• A)likely affect the judgment of someone relying on the financial statements.
• B)not affect the decisions of financial statement users.
• C)not impact a business decision of a creditor.
• D)result in the overstatement of assets or income.

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Definitions:

BAT Model

A framework for analyzing and understanding firms' strategic positions and potential competitive advantage.

Disbursements

The act of paying out or disbursing money, often related to the operational expenses of a business.

Interest Rate

The percent of principal charged by the lender for the use of its money or the return earned on an investment.

Net Float

The difference between checks written against a bank account and those that have been cleared, affecting the account's available balance.