Which of the Following Would Not Be a Proper Application

question 75

Multiple Choice

Which of the following would not be a proper application of the concept of materiality by Millridge Corporation?

• A)Transactions involving small dollar amounts are not recorded in Millridge's accounting records.
• B)Estimates of supplies on hand are used to determine the supplies expense for the period.
• C)On a monthly basis,utility bills are expensed in the month paid,rather than in the month in which services are used.
• D)Immaterial items are ignored in making end-of-period adjusting entries.

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Definitions:

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time, used to assess the profitability of investments.

Discount Rate

An interest rate used by central banks to lend money to commercial banks, intended to influence the broader economy.

Initial Investment

The initial amount of money or capital put into an investment project or venture.

Operating Cash Flow

The amount of money generated by a company's regular business operations, indicating its ability to pay bills, repay debts, and reinvest in its business.