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Explain Why It Is Necessary to Allocate the Preliminary Judgement

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Essay

Explain why it is necessary to allocate the preliminary judgement about materiality to individual accounts (segments)in the financial statements.Also explain why allocating to balance sheet accounts is more common than allocating to income statement accounts.


Definitions:

Physiological Consequences

The physical effects or outcomes that result from certain actions, behaviors, conditions, or interventions.

Constructive Conflict

Disagreements or disputes that lead to positive outcomes, such as problem-solving, innovation, or strengthened relationships.

Benefits

Various forms of non-wage compensation provided to employees in addition to their normal wages or salaries.

Costs

The expenditures or charges associated with obtaining, producing, maintaining, or using a product or service.

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