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:

Administrative Head

The top official in charge of the administration of an organization, overseeing its operations and ensuring adherence to policies and goals.

Cabinet-level Departments

Departments within the executive branch of the U.S. government led by secretaries who are members of the President's Cabinet, managing vast sections of public policy.

Administrative Law Judge

A judge who presides over hearings and disputes involving government agencies and their regulations.

Full Commission

A payment model where an agent or representative receives the entirety of the commission offered on the completion of a sale or deal without deductions.