An item is considered to be material if
A) the assets would be larger than the liabilities.
B) the information would change an investor's mind.
C) the company has a loss.
D) the company has never paid a dividend.

Question

Quizplus · Accepted Answer

Materiality in accounting and finance refers to the significance of transactions, balances, or errors in the financial statements. An item is considered material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements. Therefore, if the information would change an investor's mind, it is considered material. The other options do not directly relate to the concept of materiality.

An Item Is Considered to Be Material If