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Materiality in accounting means:

A All items must be recorded at exact value
B Information is material if omitting or misstating it could influence users' decisions
C Only large companies must prepare accounts
D Assets must exceed liabilities

Answer

Information is material if omitting or misstating it could influence users' decisions

Materiality is judged by size and nature relative to the user's decision. It justifies practical shortcuts for trivial items but never for anything that could mislead.

All Accounting MCQs

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