Tolerable misstatement is
A) Materiality allocated to an assertion.
B) Materiality for the balance sheet as a whole.
C) Materiality for the income statement as a whole.
D) Materiality allocated to a specific account.

Question

Quizplus · Accepted Answer

Tolerable misstatement refers to the maximum amount of misstatement that can be considered acceptable for a specific account without materially affecting the overall financial statements. Therefore, it is materiality allocated to a specific account.

Tolerable Misstatement Is