An Item Would Be Considered Material and Therefore Would Be

question 36

Multiple Choice

An item would be considered material and therefore would be disclosed in the financial statements if the

• A) expected benefits of disclosure exceed the additional costs.
• B) impact on earnings is greater than 3 percent.
• C) FASB definition of materiality is met.
• D) omission of misstatement of the amount would make a difference to the users.

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Definitions:

Unanimous

Complete agreement or consent among all members or participants.

Partnership Agreement

A legal document that specifies the rights and obligations of partners within a business partnership.

Deceased Partner

A Deceased Partner is a member of a partnership who has passed away, raising considerations regarding the continuation or dissolution of the business under partnership laws.

Majority Vote

A decision-making process where more than half of the votes cast by members eligible to vote are needed to pass a resolution or make a decision.