Misstatements Must Be Compared with Some Measurement Base Before a Decision

question 41

Multiple Choice

Misstatements must be compared with some measurement base before a decision can be made about the materiality of the failure to follow accounting standards.A commonly accepted measurement base is:

• A) profit.
• B) total assets.
• C) current assets.
• D) all of the above

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Definitions:

Macroeconomic Environments

The overall condition and economic factors at a large scale affecting an economy, including inflation, growth, employment, and policies.

Expected Expense

Expected expense is a forecasted cost anticipated to be incurred in the execution of a plan or operation.

Expected Revenue

The anticipated amount of money a business will receive from its operations, calculated by multiplying potential sales quantity by the selling price.

Expected Revenue

The anticipated income from the sale of goods or services, calculated by multiplying the expected sales volume by the unit price.