An Item Is Considered Material If

question 21

Multiple Choice

An item is considered material if

• A) It doesn't cost a lot of money.
• B) It is of a tangible good.
• C) It is likely to influence the decision of an investor or creditor.
• D) The cost of reporting the item is greater than its benefits

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Definitions:

Liabilities

Financial obligations or debts owed by a business to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Assets

Assets are possessions or property that a company owns or controls, anticipated to yield benefits in the future.

Claims

Demands for payment or entitlements to compensation for loss, damage, or injury; often encountered in insurance and legal contexts.

Creditors

Entities or organizations that provide loans or offer credit facilities to people.