There are 2 companies - Company A & Company B. Company A has a Net Worth of Rs 1000 Crores while company B has a Net Worth of Rs 1 Crore. A customer owes Rs 1,00,000 to both the companies. For which of the companies shall this amount be material?

Company A

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Company B

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None of the above

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Both A & B

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Solution

The correct option is B Company B
Information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements. Hence the amount of Rs 1,00,000 is material for company B only.

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There are 2 companies - Company A & Company B. Company A has a Net Worth of Rs 1000 Crores while company B has a Net Worth of Rs 1 Crore. A customer owes Rs 1,00,000 to both the companies. For which of the companies shall this amount be material?

The correct option is B Company BInformation is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements. Hence the amount of Rs 1,00,000 is material for company B only.

The correct option is B Company B
Information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements. Hence the amount of Rs 1,00,000 is material for company B only.