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Information about an item is _______ if its ommission or misstatement might influence the financial decision of the users taken on the basis of that information

A. Concrete

B. Complete

C. Immaterial

D. Material

Answer: Option D

Solution(By Examveda Team)

Materiality is a concept in financial accounting and reporting that firms may disregard trivial matters, but they must disclose everything that is important to the report audience. Items that are important enough to matter are material items.

This Question Belongs to Commerce >> Accounting

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Comments ( 3 )

  1. Shahbaz Ali
    Shahbaz Ali :
    2 years ago

    Materiality is an accounting principle that states that all items that are reasonably likely to impact investors' decision-making must be recorded or reported in detail in a business's financial statements using GAAP or applicable standards.
    The concept of materiality works as a filter through which management sifts information. Its purpose is to make sure that the financial information that could influence investors' decisions is included in the financial statements is true.

  2. Mahmood Alam
    Mahmood Alam :
    5 years ago

    PLEASE EXPLAIN

  3. Umme Ara
    Umme Ara :
    6 years ago

    How ? Can you explain plzz

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