The Concept of Materiality

question 72

Multiple Choice

The concept of materiality:

• A)Involves only tangible assets and not intangible assets.
• B)Relates only to the income statement and not the balance sheet.
• C)Is always an exact percentage of a financial account balance.
• D)Is measured as an item significant enough to influence the decisions of users of financial statements.

---

Definitions:

External Cues

External signals or stimuli that can influence behavior and decision-making processes.

Living

The condition of being alive and exhibiting processes such as growth, metabolism, reproduction, and response to stimuli.

Ultradian Rhythms

Biological rhythms with a cycle shorter than 24 hours, such as the stages of sleep.

Infradian Rhythms

Biological rhythms with cycles longer than 24 hours, such as monthly cycles like menstruation, or yearly cycles like seasonal affective disorder.