There Are Often a Large Number of Immaterial Errors Discovered

question 47

Multiple Choice

There are often a large number of immaterial errors discovered that do not require an adjustment at the time they are found.How should these errors be dealt with by the auditor?

• A)Since these items are individually immaterial,the auditor would not recommend adjusting entries to the client.
• B)Since there are a large number of these,the auditor would recommend adjusting entries to the client.
• C)The auditor must combine the individually immaterial errors and evaluate whether the combined amount is material.
• D)The auditor would never combine these individually immaterial amounts because that would mix apples and oranges.

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Definitions:

Loanable Funds Theory

An economic theory that suggests the market interest rate and the quantity of loanable funds are determined by the demand and supply of credit.

Interest Rates

The cost of borrowing money or the return on investments, usually expressed as a percentage.

Present Consumption

refers to the amount of goods and services consumed by individuals or households at the current time, as opposed to saving for future use.

Loanable Funds Curve

A graphical representation of the market for loanable funds, showing the relationship between the real interest rate and the quantity of loanable funds supplied and demanded.