Which of the Following Statements Is True Concerning the Allocation

question 50

Multiple Choice

Which of the following statements is true concerning the allocation of preliminary materiality?

• A) It is necessary to allocate preliminary materiality to financial statements as a whole rather than by segments.
• B) Preliminary materiality should be allocated to income statement accounts only.
• C) It is required by the SEC.
• D) When preliminary materiality is allocated to segments it is termed tolerable misstatement.

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Definitions:

Brief Bit

A small or succinct piece of information or news.

Behavior

The actions, reactions, or conduct of an individual, group, or system in response to external or internal stimuli.

Perceived

Relates to the way in which an individual or group views, understands, and interprets something, often affecting attitudes and behaviors.

Characteristics

Distinguishing traits or features that define an individual, object, or concept.