The Materiality Constraint

question 71

Multiple Choice

The materiality constraint:

• A) Prescribes that only information that would influence the decisions of a reasonable person need be disclosed.
• B) Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.
• C) Provides guidance on when a company must recognize revenue.
• D) Prescribes that accounting information is based on actual cost.
• E) Prescribes that a company record the expenses it incurred to generate the revenue reported.

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Definitions:

Robbing A Small Business

The act of illegally taking property from a small business through threats or violence.

Statute Of Limitations

A law that sets the maximum period one can wait before filing a lawsuit, depending on the type of case or claim, after which the legal claim is no longer valid.

Petty Theft

The theft of property of relatively low value, considered a minor crime.

Armed Robbery

A criminal act where an offender uses a weapon to steal property from another person.