In deciding whether an item is material, a young accountant determines that an item is less than 5% of the appropriate base amount.This means that the item:
A)is material
B)is not material
C)is in the no presumption range
D)could be material depending on qualitative factors

Question

Quizplus · Accepted Answer

The 5% guideline is a quantitative measure, but materiality also depends on qualitative factors. An item less than 5% of a base amount could still be material if it has significant qualitative implications.

In Deciding Whether an Item Is Material, a Young Accountant