Information that is material means that an error in recording the dollar amount of a transaction would:
A) likely affect the judgment of someone relying on the financial statements.
B) not affect the decisions of financial statement users.
C) not impact a business decision of a creditor.
D) result in the overstatement of assets or income.
A
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Under the provisions of FASB ASC Topic 825 (Financial Instruments),
a. the election of the fair value option for investment securities classified as available-for-sale securities would result in unrealized gains and losses on these securities being included in other comprehensive income. b. the election of the fair value option for investment securities classified as trading securities would result in unrealized gains and losses on these securities being included in other comprehensive income. c. the election of the fair value option for investment securities classified as held-to-maturity securities would result in unrealized gains and losses on these securities being included in earnings in the income statement. d. the election of the fair value option for investment securities currently classified as trading, available-for-sale, or held-to-maturity is not available and can only be applied to new securities that an entity purchases.
Which of the following is a common error that MOST hinders the accurate interpretation of data?
a. Interpretation of results from a large sampling b. Tabulation of a questionnaire with many items c. Assumption of a cause-effect relationship when one does not exist d. Application of statistical analysis
Income bonds pay interest only if the issuing company actually earns the indicated interest. Thus, these securities cannot bankrupt a company, and this makes them safer from an investor's perspective than regular bonds.
Answer the following statement true (T) or false (F)
In U.S. v. United States Gypsum, regarding sharing of price information by gypsum makers, the Supreme Court held that:
a. the gypsum industry is so small that it simply could not conspire to restrain information b. the case was subject to a per se rule against price fixing, so it was illegal c. the gypsum industry, being part of construction, is exempt from antitrust laws d. the gypsum industry is so small information sharing is essential e. none of the other choices