Which of the Following Statement(s)is/are True with Respect to Materiality

question 22

Multiple Choice

Which of the following statement(s) is/are true with respect to materiality?

• A) Materiality refers to the notion that an item need not be recognised in the financial reports.
• B) Materiality is a primary qualitative characteristic.
• C) Materiality relates to financial information where its omission or misstatement could influence the economic decisions of users.
• D) Materiality relates to financial information where its omission or misstatement could influence the economic decisions that users make about a specific reporting entity.

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Definitions:

Future Value

The value of an investment at a specified date in the future, taking into account factors like interest rates or dividends.

Compounded Annually

The process of adding interest to the initial amount of an investment, where the interest earned each year is added to the principal.

Invested

Invested pertains to the funds that have been allocated into financial instruments, assets, or business ventures with the goal of earning a return.

Rate of Return

A positive or negative variation in an investment’s worth over a set schedule, expressed as a percentage of what the investment initially cost.