Which One of the Following Statements Best Describes the Concept

question 7

Multiple Choice

Which one of the following statements best describes the concept of materiality?

• A)Materiality is determined by reference to specific quantitative guidelines established by the AICPA.
• B)Materiality depends only on the dollar amount of an item relative to other items in the financial statements.
• C)Materiality depends on the nature of an item but not on the dollar amount of the item.
• D)Materiality is largely a matter of professional judgment.

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Definitions:

Reviewing

The process of examining or assessing something with the possibility of instituting change if necessary.

Marking

The act of scoring or grading assessments, or indicating important information with symbols or signs.

Review

A process of going over a subject again for the purpose of evaluation or revision.

Midterm

An examination or assessment occurring in the middle of an academic term to evaluate students' understanding and progress.