Benchmarks are needed for evaluating materiality.What base would you use for the balance sheet?
A) operating profit before income tax
B) current assets
C) total assets
D) current liabilities

Question

Quizplus · Accepted Answer

Total assets provide the broadest base for evaluating materiality on the balance sheet, as it includes both current and non-current assets. Current assets (Option B) and current liabilities (Option D) only provide a snapshot of a company's short-term liquidity position, and operating profit before income tax (Option A) relates to the income statement rather than the balance sheet.

Benchmarks Are Needed for Evaluating Materiality