Which of the Following Statements Is Not Correct

question 94

Multiple Choice

Which of the following statements is not correct?

• A) Materiality is a relative rather than an absolute concept.
• B) The most important base used as the criterion for deciding materiality is total assets.
• C) Qualitative factors as well as quantitative factors affect materiality.
• D) Given equal dollar amounts, frauds are usually considered more important than errors.

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Definitions:

Bonds Payable

Bonds payable refers to long-term debt instruments issued by a company to investors, promising to pay back with interest at specified maturity dates.

Operating Activities

Cash flow activities that include the cash effects of transactions that create revenues and expenses and thus enter into the determination of net income.

Issuance of Debt

The process by which a company borrows money through the sale of bonds or taking out loans, creating a liability that must be repaid in the future.

Retirement of Debt

The process of paying off debt obligations or securities over time through systematic repayments or a lump-sum payment.