This Question Is Subjective

question 51

Multiple Choice

This question is subjective.Which of the following statements might be most appropriate in terms of providing guidance on determining a materiality level?

• A)If the amount is equal or greater than 10% of the appropriate base amount, the item is material.
• B)If the amount is equal or greater than 10% of the appropriate base amount, the item is immaterial.
• C)If the amount is equal or less than 5% of the appropriate base amount, the item is material
• D)If the amount is equal or greater than 10% of the appropriate base amount, the item is material; if the amount is equal or less than 5% of the appropriate base amount, the item is immaterial.

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Definitions:

Balance Sheet

A financial statement that provides a snapshot of a company's financial condition at a particular moment in time, showing assets, liabilities, and shareholders' equity.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services provided.

Ending Equity

The value of ownership in a company at the end of an accounting period, calculated as assets minus liabilities.

Dividends Paid

The actual cash distributed to shareholders out of the corporation’s earnings in a particular period.