Which one of the following statements best describes the concept of materiality?
A. Materiality is largely a matter of professional judgment.
B. Materiality is determined by reference to specific quantitative guidelines established by the AICPA.
C. Materiality depends on the nature of an item but not on the dollar amount of the item.
D. Materiality depends only on the dollar amount of an item relative to other items in the financial statements.
Answer: A
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One of the advantages of licensing is:
A) licensees have limited control. B) licensees have considerable autonomy. C) license agreements have short life. D) licensees can develop similar products. E) licensees have considerable leverage.
Edward I. Altman developed a multivariate model to predict bankruptcy. The model produces an overall discriminant score called a Z value. Which of the following statements is probably an unreasonable statement relating to the Z value?
a. The sales generating ability of the firm's assets is one of the important considerations in the Z value. b. The lack of a market value for a company's stock will reduce the significance of the Z value approach. c. Total assets is an important consideration in the Z value computation. d. Cumulative profitability over time is considered in the Z value computation. e. A Z score of 2.00 or below indicates a very healthy company.
Asiana, a fragrance manufacturer located in France, markets its products to the North American and Asian countries through independent distributors. In this case, Asiana has entered into international markets through ________
A) joint ownership B) joint venturing C) indirect exporting D) direct investment E) franchising
The tighter the probability distribution of its expected future returns, the greater the risk of a given investment as measured by its standard deviation.
Answer the following statement true (T) or false (F)