Materiality is used in all of the following situations of providing financial information, except:
A) where an amount is of relative large size and importance.
B) where it would impact the judgment of a reasonable person.
C) where it would not make a difference in the actions of decision maker.
D) where omission of the information would result in bias.

Question

Quizplus · Accepted Answer

Materiality is used to determine if financial information should be included in financial statements or not. If the information is not material, then it can be omitted from the financial statements without affecting the decisions of the users of the financial statements. Therefore, option C is the correct answer as it states that materiality is not used where the information would not make a difference in the actions of decision makers. Options A, B, and D are all situations where materiality is considered when providing financial information.

Materiality Is Used in All of the Following Situations of Providing