The Concept of Materiality

question 46

Multiple Choice

The concept of materiality:

• A)Treats as material only those items that are greater than 2% or 3% of net income.
• B)Justifies ignoring the matching principle or the realization principle in certain circumstances.
• C)Affects only items reported in the income statement.
• D)Results in financial statements that are less useful to decision makers because many details have been omitted.

---

Definitions:

Demonstrating Power

The act of showing or exerting authority, control, or influence over others, often to assert dominance or achieve objectives.

Interaction

is the reciprocal action or influence between entities, leading to a continuous exchange of information or action.

Interpersonal Trust Scale

A psychological tool used to measure the degree of trust between individuals in personal and professional relationships.

Self-protection

Strategies or actions taken by an individual to safeguard themselves from harm or danger.