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.

Question

Quizplus · Accepted Answer

Materiality refers to the magnitude of an omission or misstatement of accounting information that could influence the judgement of someone relying on the financial statements. In other words, if the error is material, it could potentially affect the decisions made by financial statement users.

Information That Is Material Means That an Error in Recording