If it is probable that the judgment of a reasonable person will be changed or influenced by the omission or misstatement of information, then that information is, by definition of FASB Statement No.2:
A)material.
B)insignificant.
C)significant.
D)relevant.

Question

Quizplus · Accepted Answer

FASB Statement No.2 defines materiality as information that could reasonably influence the judgment of a reasonable person. Therefore, if the omission or misstatement of information is likely to change or influence the judgment of a reasonable person, then that information is material.

If It Is Probable That the Judgment of a Reasonable