The Comment That "Items That Are Not Material May Be

question 9

Multiple Choice

The comment that "items that are not material may be recorded in the financial statements in the most economical and expedient manner possible" is representative of:

• A) matching
• B) conservatism
• C) realization
• D) materiality
• E) none of the answers are correct

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Definitions:

Product Warranty Expense

Costs associated with repairing or replacing defective products under warranty.

Replacement Warranty

A guarantee provided to a purchaser of a product that a defective item will be replaced within a specified period of time.

Unfunded Pension Liability

A pension obligation for which sufficient assets have not been set aside, representing a potential future liability for the employer.

Current Liability

A company's debts or obligations that are due to be paid within one year or within the normal operating cycle.