Which of the Following Statements Is Correct Regarding the Quantitative

question 7

Multiple Choice

Which of the following statements is correct regarding the quantitative guidelines for materiality in AASB 1031?

• A)if the particular item is equal to or greater than 20% of the appropriate base amount,it would be presumed to be material unless there is evidence or convincing argument to the contrary
• B)amounts equal to or greater than 5% of the base amount would be presumed to be material unless there is evidence or convincing argument to the contrary
• C)if the particular item is less than 10% of the appropriate base amount,it would be presumed to be material unless there is evidence or convincing argument to the contrary
• D)if the particular item is equal to or greater than 10% of the appropriate base amount,it would be presumed to be material unless there is evidence or convincing argument to the contrary

Analyze and calculate ratios and proportions in various contexts.

Apply exchange rate information to calculate the impact on import prices.

Solve complex proportions involving multiple variables.

Calculate the data storage capacity and utilization.

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Definitions:

Earnings Reinvested

Profits that are not paid out as dividends but are instead reinvested in the business to fund growth or pay down debt.

Retention Rate

A metric indicating the percentage of earnings not paid out as dividends but retained by the company for reinvestment.

Plowback Ratio

The proportion of the firm’s earnings reinvested in the business (and therefore not paid out as dividends). The plowback ratio equals 1 minus the dividend payout ratio.

Expected Growth Rate

The anticipated rate at which an investment, economy, or other financial entity will grow over a certain period.