A Company Decides to Ignore a Very Small Error in Their

question 48

Multiple Choice

A company decides to ignore a very small error in their inventory balance.This is an example of which of the following principles?

• A) Accounting conservatism
• B) Materiality concept
• C) Disclosure principle
• D) Consistency principle

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Definitions:

Externalities

Costs or benefits that affect parties who did not choose to incur those costs or benefits, often leading to market failures.

Polluting

The act of contaminating the environment with pollutants, such as chemicals, noise, or heat, that can harm organisms and the ecosystem.

Treatment Plant

A facility where pollutants are removed from water, air, or waste to reduce environmental impact and protect public health.

Filter

A device or process that removes unwanted parts from a substance or signal.