An Item That Is Considered Material Due to Its Magnitude

question 48

Multiple Choice

An item that is considered material due to its magnitude is referred to as being

• A) quantitatively material.
• B) of no interest to the auditor.
• C) qualitatively material.
• D) none of the above

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Definitions:

Producer Surplus

The difference between the amount that producers are willing and able to sell a good for and the actual amount they receive due to market dynamics.

Equilibrium Price

The price at which the quantity of goods demanded by consumers equals the quantity of goods supplied, resulting in market balance.

Legal Price

A price that is established by law or regulation, rather than determined by the market.

Total Surplus

The sum of consumer surplus and producer surplus, reflecting the total net benefit to society from the production and consumption of goods or services.