A Significant Risk Is the Same as a Material Risk

question 64

True/False

A significant risk is the same as a material risk.

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Definitions:

Direct Materials

Raw materials that can be directly associated with the production of specific goods or services.

Direct Labor

The wages and benefits paid for labor that is directly involved in the production of goods or the provision of services.

Variable Selling

This term likely refers to variable selling expenses, which are costs that fluctuate with sales volume, such as commissions or shipping fees.

Administrative Expense

Costs related to the general operation of a business, such as office supplies, salaries of administrative staff, and utilities, but not linked directly to production or sales.