The concept of materiality:
A)Involves only tangible assets and not intangible assets.
B)Relates only to the income statement and not the balance sheet.
C)Is always an exact percentage of a financial account balance.
D)Is measured as an item significant enough to influence the decisions of users of financial statements.

Question

Quizplus · Accepted Answer

Materiality refers to the significance of an item or amount in the decision-making process of users of financial statements. It is not necessarily an exact percentage, and it can apply to both tangible and intangible assets, as well as both the income statement and balance sheet.

The Concept of Materiality