Ignoring a write-off of inventory because it will not make a difference to financial statement users is an example of:
A)conservatism.
B)consistency.
C)materiality.
D)entity.

Question

Quizplus · Accepted Answer

Materiality refers to the judgment about whether a financial statement item is large enough to influence the decision of a reasonable person. If the amount is immaterial, it can be ignored in financial reporting. In this case, ignoring the write-off of inventory because it will not make a difference to financial statement users is an example of applying materiality.

Ignoring a Write-Off of Inventory Because It Will Not Make