Consider the Following Information You Are an Accountant for Both Firms and Would Like

question 52

Multiple Choice

Consider the following information
$$\begin{array} { | l | r | r | } \hline & \text { Mosman Ltd } & \text { Manly Ltd } \\\hline \text { Sales } & \$ 5000000 & \$ 50000 \\\hline \text { Cost and expenses } & 4000000 & 40000 \\\hline \text { Net profit } & 1000000 & 10000 \\\hline & & \\\hline \text { Impairment loss } & 40000 & 5000 \\\hline\end{array}$$
You are an accountant for both firms and would like to determine whether the impairment loss is material or not.Which of the following statement(s) is/are correct?

• A) The impairment loss for both firms is material.
• B) The impairment loss for Manly Ltd is material.
• C) The impairment loss for Mosman Ltd is material.
• D) The impairment loss for both firms is immaterial.

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Definitions:

William James

An American philosopher and psychologist, often referred to as the father of American psychology.

Wilhelm Wundt

Often regarded as the father of psychology, he established the first psychology laboratory at the University of Leipzig, Germany.

John B. Watson

An American psychologist who established the psychological school of behaviorism, emphasizing the study of observable behavior.

Sigmund Freud

An Austrian neurologist and the founding father of psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.