Bases Are Needed for Evaluating Materiality

question 62

Multiple Choice

Bases are needed for evaluating materiality. If you used operating profit before income tax, what minimum percentage would you use for planning materiality?

• A) 1%
• B) 5%
• C) 10%
• D) None of the above

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Definitions:

Appraisal

The process of professionally estimating the value of a property, typically performed by a certified appraiser.

Market Value

The current price at which an asset or service can be bought or sold in the open market.

Purchase Price

The purchase price is the amount of money paid to buy an asset, product, or service.

Ethically

Acting in ways considered morally right and professionally appropriate according to standards of conduct.