Which One of the Following Statements Is Correct Concerning the Concept

question 21

Multiple Choice

Which one of the following statements is correct concerning the concept of materiality?

• A) Materiality is determined by reference to guidelines established by ASIC.
• B) Materiality depends only on the dollar amount of an item relative to other items in the financial report.
• C) Materiality depends on the nature of an item rather than on the dollar amount.
• D) Materiality is a matter of professional judgment.

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Definitions:

Expense Ratio

Expense Ratio is the annual fee that mutual funds, exchange-traded funds (ETFs), and other pooled investment products charge their shareholders, expressed as a percentage of assets under management.

Rate of Return

The profit or deficit experienced from an investment, represented as a percentage of the investment's starting price.

Multiple-class Shares

Stocks issued by a single company that have different rights, dividends, or voting powers, typically designated as Class A, Class B, etc.

Front-end Load

A commission or sales charge applied at the time of the initial purchase of an investment.