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Money Supply

An Accounting...

Question

An Accounting information is said to be "______" if its inclusion or exclusion effect the decision of the users of the accounting information.

A

Reliable

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B

Verifiable

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C

Objective

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D

Material

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Solution

The correct option is D Material
Materiality concepts says that firm should give importance to those details which are material in nature and ignore the insignificant details.
In accounting, materiality refers to the relative size of an amount. Determining materiality requires professional judgement.
For instance, a $20, 000 a m o u n t w i l l l i k e l y b e i m m a t e r i a l f o r a l a r g e c o r p o r a t i o n w i t h a n e t i n c o m e o f$ 900,000.

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