The Concept of Materiality

question 72

Multiple Choice

The concept of materiality:

• A)Involves only tangible assets and not intangible assets.
• B)Relates only to the income statement and not the balance sheet.
• C)Is always an exact percentage of a financial account balance.
• D)Is measured as an item significant enough to influence the decisions of users of financial statements.

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Definitions:

Antedated

Refers to a document or event dated earlier than the actual date, often done to give the appearance of an earlier occurrence.

Material Fact

A fact that is significant or essential to the issue or matter at hand, which, if known, could influence an individual's decision.

Nondisclosure

An agreement or clause that prohibits the sharing of confidential information.

Material Fact

Information that is significant enough to influence a decision or the outcome of a legal case or transaction.