Information that is material means that an error or alternative method of handling a transaction
A) Would possibly affect the judgment of someone relying on the financial statements
B) Would not affect the decisions of users
C) Might cause a company to understate its earnings for the accounting period
D) Could increase the profitability of a company

Question

Quizplus · Accepted Answer

Materiality refers to the importance or significance of an item in financial statements. Information that is material means that it could potentially affect the judgment of someone relying on the financial statements to make decisions.

Information That Is Material Means That an Error or Alternative