When Allocating Materiality, Most Practitioners Choose to Allocate To

question 88

Multiple Choice

When allocating materiality, most practitioners choose to allocate to:

• A) both balance sheet and income statement accounts because there could be errors on either one.
• B) the income statement accounts because they are more important.
• C) all of the financial statements because there could be errors on other statements besides the income statement and balance sheet.
• D) the balance sheet accounts because there are fewer.

---

Definitions:

Avoidance-avoidance

A conflict situation where a choice must be made between two undesirable options.

Approach-approach

A conflict situation where an individual must choose between two desirable outcomes.

Incompatible demands

Situations or expectations that are at odds with one another, making it difficult to comply with both simultaneously.

Approach-avoidance

A psychological conflict that occurs when an individual is simultaneously drawn to and repelled by the same object, goal, or activity.