The Primary Concern in Measuring Materiality When a Client Has

question 74

Multiple Choice

The primary concern in measuring materiality when a client has failed to follow an accounting standard is usually:

• A) whether it can materially affect some future period.
• B) the total dollar error in the accounts involved, compared with some base.
• C) the nature of the item in error.
• D) measurability of the dollar error.

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Definitions:

Source Documents

Original records or documents containing important details of a transaction, used as evidence and data for bookkeeping.

Sales Receipts

Documents that provide proof of a transaction between a seller and a buyer, indicating the exchange of goods or services for payment.

Bank Statements

Financial statements issued by a bank detailing the transactions in a depositor's account over a certain period.

Chart of Accounts

A listing of all the accounts in a business's general ledger, which includes assets, liabilities, revenue, expenses, and equity.