An Item Is Considered Material If

question 65

Multiple Choice

An item is considered material if

• A) it doesn't cost a lot of money.
• B) it is of a tangible good.
• C) it is likely to influence the decision of an investor or creditor.
• D) the cost of reporting the item is greater than its benefits.

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Definitions:

Current Ratio

A measure used to evaluate a company’s liquidity and short-term debt-paying ability; computed by dividing current assets by current liabilities.

Vertical Analysis

A financial statement analysis method where each entry for each category is listed as a percentage of a base figure within the statement.

Horizontal Analysis

A financial analysis technique that compares line items in financial statements over different periods to identify trends.

Horizontal Analysis

Horizontal analysis is a financial analysis technique that compares historical financial data over a series of periods.