Which of the following statements concerning materiality is true?
A)Generally accepted accounting principles are violated if estimates are used in end-of-period adjustments.
B)Each year the Financial Accounting Standards Board (FASB)publishes the dollar amount considered "material" for each industry.
C)Immaterial items should be handled in the most expedient manner,even if resulting financial statements are not completely precise.
D)Accountants should not waste time and money in recording transactions involving small dollar amounts.

Question

Quizplus · Accepted Answer

Materiality refers to the significance of an item or event to a company's financial statements. Immaterial items are those that are not significant enough to impact the overall accuracy of the financial statements. In such cases, accountants should use the most expedient and cost-effective method to handle them, even if it means not recording them. This approach is known as the materiality concept. Therefore, option C is the correct statement about materiality. Statements A, B, and D are incorrect.

Which of the Following Statements Concerning Materiality Is True