In Deciding Whether an Item Is Material, a Young Accountant

question 18

Multiple Choice

In deciding whether an item is material, a young accountant determines that an item is less than 5% of the appropriate base amount.This means that the item:

• A)is material
• B)is not material
• C)is in the no presumption range
• D)could be material depending on qualitative factors

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Definitions:

Quantitative Measure

Numerical indicators used to evaluate, compare, or track performance or production.

Productivity

The measure of the effectiveness of a production system, usually quantified as the ratio of output to input over a specific period.

Efficiency

The ratio of useful output to total input, highlighting the effectiveness of a process, system, or organization in utilizing resources.

Intensive Technology

Focuses the efforts and talents of many people to serve clients.