Which of the Following Is the Primary Basis Used to Decide

question 78

Multiple Choice

Which of the following is the primary basis used to decide materiality for a for-profit entity?

• A) net sales
• B) net assets
• C) net income before tax
• D) all of the above

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Definitions:

GAAP

In any particular legal area, the Generally Accepted Accounting Principles are the recognized standard of guidelines for conducting financial accounting.

Probable

Probable refers to the likelihood that a future event will occur, often used in accounting to determine if a contingent event should be recorded.

Warranty Obligations

Warranty obligations are promises made by a seller to a buyer to repair, replace, or rectify defects in goods sold within a certain period after the sale.

Premium Offer

A premium offer is a marketing strategy where additional value is added to the regular product or service offering to encourage purchase or enhance customer satisfaction.