The concept of materiality (indicate all correct answers):
A) Requires that financial statements are to be accurate to the nearest dollar, but need not show cents.
B) Is based upon what users of financial statements are thought to consider important.
C) Permits accountants to ignore other generally accepted accounting principles in certain situations.
D) Permits accountants to use the easiest and most convenient means of accounting for events that are immaterial.

Question

Quizplus · Accepted Answer

Materiality is based on what users of financial statements consider important, and accountants must ensure that material items are accurately and appropriately disclosed, even if they are small in amount. Materiality does not permit accountants to ignore other generally accepted accounting principles or to use the easiest and most convenient means of accounting for events that are immaterial. Additionally, materiality does not specify a particular level of accuracy required in financial statements.

The Concept of Materiality (Indicate All Correct Answers)